Remove everything but first 'source-directory' line in /etc/network/interfaces
.
Using nano:
sudo nano /etc/network/interfaces
Use CTRL+K to delete lines, CTRL+O to save, and CTRL+X to exit nano editor.
Enable 'dhcpcd' with:
sudo systemctl enable dhcpcd
sudo systemctl disable networking
Restart the Pi to have the changes take effect.
Reboot from GUI, or use terminal command:
sudo reboot
WiFi should work now.
Same issue here with a pi1 B+ with an RTL8188CUS based dongle. Seems the kernel modules may have quietly been deleted for these devices... They work fine on buster, and even earlier bullseye versions, but do not work on the latest Bullseye, they do show when using lsusb though which leads me to think driver / module related.