So the bug was about the screen recording permission needed for some apps, Shottr specifically. Despite me allowing screen recording previously macOS Sequoia kept asking me to go into the settings and give the permission. According to Apple, that should have had happened once a week, so I gave a follow up feedback about definitely me not wanting to repeat this more than once. Fingers crossed I won't have to fiddle with permission when taking a screenshot.
But unfortunately it appears that they only changed the policy to do it once a month: https://a.dropoverapp.com/cloud/download/50dcbf08-a812-4ef4-...
Still better than once a week and the final UI is fine, but IMHO it should have an option to disable this behavior.