annv I looked at the files contained in the update (KB5012599) and can see that some files related to DWM have been modified.
"dwmapi.dll","10.0.19041.746","02-Apr-2022","19:03","149,128"
"dwmapi.dll","10.0.19041.746","02-Apr-2022","19:03","138,936"
"dwmghost.dll","10.0.19041.1151","02-Apr-2022","19:06","66,560"
"dwm.exe","10.0.19041.746","02-Apr-2022","19:02","94,720"
"dwmapi.dll","10.0.19041.746","02-Apr-2022","19:06","172,552"
"dwmredir.dll","10.0.19041.1620","02-Apr-2022","19:06","172,544"
"dwmscene.dll","Not versioned","02-Apr-2022","19:05","2,426,368"
"dwmcore.dll","10.0.19041.1645","02-Apr-2022","19:03","3,473,920"
"dwmcore.dll.mun","10.0.19041.1645","02-Apr-2022","19:03","175,104"
"rdsdwmdr.dll","10.0.19041.1620","02-Apr-2022","19:03","232,448"
Some related to DirectX as well (not listed)
@ensete (tagging you because you're working on the investigation with Microsoft contacts)
While I certainly don't think giving valuable contacts at tech companies a million needles and haystacks is a good method towards getting this issue solved I think having a reproducible "cause and effect" relationship to some known change to be the best ticket towards investigating and fixing this issue. The fact you (separate to this) were able to install Windows 7 with a different set of updates and turn what should be a "good" Windows 7 installation into a "bad" installation is potentially closer to a smoking gun and I potentially have some independent means of investigation if you're interested.