Since GNOME 40 the keyboard layout indicator doesn’t work if the keyboard is switched using a key combination defined in GNOME Tweaks. The indicator does work for key combinations defined through GNOME Setting’s Keyboard Shortcut settings. However, GNOME Settings doesn’t allow one to set Alt+Shift as the key combination layout switching, as it seems to require at least one non-modifier key in every shortcut. This limitation only exists in GNOME Settings GUI and you can work around it by defining the shortcut using
$ gsettings set org.gnome.desktop.wm.keybindings switch-input-source "['<Shift>Alt_L']" $ gsettings set org.gnome.desktop.wm.keybindings switch-input-source-backward "['<Alt>Shift_L']"