Prompted to Update iOS Deployment Target to 12.0 when deployment set to iOS 10.0

I faced that kind of problem two years ago ,that sounds weird but I had to keep old Xcode version. I was using Carthage not pods by the way

You don't have to do it. Uncheck (note that there could be other types of changes that you may want to perform) & Perform Changes, or hit cancel if all changes are for min deployment target.

With Xcode 12.3, the latest as of this writing, you can upgrade the minimum deployment target to iOS 12.0 and support a wide range of devices, according to the latest iOS version of this matrix, assuming your users will make the upgrade to iOS 12. It appears the only device left out is the iPhone 5 and 5C. I also found a complete matrix that it appears to include all devices and iOS versions.