XCTests are failing with the message: *** Canceling tests due to timeout in Waiting for test process to check in...
This just started coming up in the last few days
I had the same issue with 7.3.1, iPad 9.3.3, Mac 10.11.6
Provisioning profiles are fine and no issues on that front.
Taking hints from the steps mentioned by OP, the issue went away after restarting iPad and XCode twice (in that order). After restarting XCode, I had to unplug iPad and plug again.
Did not had to delete the Derived Data or restart the Mac.
My friend also faced similar issues and sought Apple tech support by providing sample project. Apple Tech support team responded by asking him to file a bug