It was related to ASP.NET Core with IIS - HTTP Verb Not Allowed. In the ASP.NET Core application enabling the WebDAVModule module does not allow PUT and DELETE requests.
This issue has been resolved by updating the Access Management web.config file to remove WebDAVModule.
For the scaled-out Load Balanced CME setup.
In the Tridion.ContentManager.config apart from enabling useBinaryContentProvider=true attribute, we also need to set this binaryContentStorage element and set its temporaryFolder attribute to a shared network location or you can also configure it to store the packages in the Amazon S3 bucket.
Configuring a shared ...
The solution to our problem was to change the
var pubTarget = new PublicationTarget(new TcmUri(_tcmPreview), item.Session);
var pubTarget = new TargetType(new TcmUri(_tcmPreview), item.Session)
Seems that in the version 9.5 PublicationTarget is not needed anymore