Format() expects the number of arguments being processed to match the number of format instructions. In this case, you’ve giving two format instructions (%tY and %tm) but only a single argument to format, the sole call to Now(). Instead, you would provide two different calls to Now(), so each format instruction has its own data to work with.
Format("%tY-%tm", [Now(),Now()])
2022-01
Even though there are two calls to Now() here Fauna will use the same timestamp for any functions in a given transaction, so you don’t have to worry about getting the wrong datetimes mixed up with each other.