Just downloaded the latest cumulative update today and encountered the same issue. Running RTX 4090 FE, w/ a 42" C2 LG Oled. Fortunately came across this thread after a couple of hours of troubleshooting.
Previous posts by "SamSaber1" and "Spitfire Spud" were helpful. But issue persists after restarts.
Annoying that there are comments dating 2 weeks back, no fix and one of the MS support responses was:
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[Graphics]
- *[NEW]*When connecting your PC to some older Dolby Vision displays, in some cases you might see severe discoloration. You can navigate to Settings > System > Display > HDR turn off “Use Dolby Vision mode” as a workaround to resolve the issue or disconnect the display.
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??? Older Dolby Vision displays ??? The C2 was released in mid 2022. Newer than windows 11 OS release. This isn't an issues of outdated hardware and disconnect of the display doesn't solve anything. It's a software compatibility regression. June 2025 cumulative update has reintroduced issues with HDR pipeline handling. The problem seems to be a buggy Windows HDR behavior.
Between buggy various MS updates and unstable Nvidia drivers releases, it's about enough to make one go insane.