The phone used to have AR functionality both available and functional, but it has stopped working entirely. Applications ask for new version to be installed, and the "Google Play Services for AR" version on Google Play is itself said to "be incompatible with your phone".
The phone's Android 11 OS has latest official updates installed. The device itself is listed as supported device in the ARCore documentation as:
"HMD Global - Nokia 7.2 - Requires Android 10.0 or later"
However, the more in-depth list doesn't have 7.2 as an entry: https://github.com/rolandsmeenk/ARCore-devices/blob/master/arcore_devicelist.csv
Is there something I could do to try and solve this?
Try to install ARCore from APK file by Google, which is hosted on their GitHub repo: https://github.com/google-ar/arcore-android-sdk/releases/tag/v1.33.0
You need to download and install Google_Play_Services_for_AR_"VERSION".apk