I’ve attached a screenshot of what I see when I do this.  I noticed that

(setq org-preview-latex-default-process 'dvisvgm)

seems to be crucial for reproducing the problem.  If the variable is set
to use dvipng, then the picture does shows up as expected (but as inline
PNG format, not SVG).

(setq org-preview-latex-default-process 'dvipng)