Apple's updated third beta of iOS 16 adds support for full screen now playing controls. This feature was announced in the WWDC 2022 keynote but not available for testing until today.
"Now with Live Activities, the Now Playing controls can expand to a full screen view that celebrates album art while you listen along."
When viewing the expanded player, the lock screen background features colors from your album art. Tapping off the player will return the lock screen to your default wallpaper with compact controls.