There are now many instances where various neurological functions are inhibited after contracting COVID-19. These are largely the senses of smell and taste.
A recent observation has been made that the SARS-CoV-2 virus is directly responsible for these neurological results, and may occur from its ability to invade neurological cells through the neuropilin-1 receptor common on many cells (1,2).
It seems likely that the loss of smell and/or taste may be a result of direct viral invasion and disruption of the cells responsible for these two senses.
1.
https://www.livescience.com/coronavirus-second-secret-doorway-into-cells.html
2.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7533503/