Blender 2.8/2.9 VS 3.0 : Broken Armature Compatibility

Todor Nikolov writes:

Blender 3.0 breaks compatibility with earlier versions of Blender, especially with Armature/rigs.

If your mesh shrinks to the origin after you parent "With Automatic weights", it's probably because of this compatibility issue. You must have opened a rig saved in Blender 3.0+ in an earlier version of Blender.

For reference, it might look something like this (haha)
https://imgur.com/a/1RP51WX

Check out this short video for the solution.
https://www.youtube.com/watch?v=Hiw3gEZCgwo