SOLUTION! (for some)
Alright. I have been having this issue since switching to Windows 11 on my Asus laptop and have visited this thread about 30 times.
I have finally discovered what was causing this issue for me and I am happy to say the fix has stuck over multiple restarts and updates and does not require changing any other settings in the Windows Taskbar menu.
Explanation:
My laptop has an OLED display and is an Asus laptop. Asus has a piece of (unfortunately necessary) bloatware called Armory crate that comes pre-installed on their system. This software has a section called GameVisual that injects color profiles into windows to pick up and apply. Upon restarting my system, this service would reset all Windows settings to match its own. I noticed that when starting Windows my taskbar would actually hide, then the big "D" image would appear on my screen - what GameVisual displays whenever it sets the profile to "Default". After this, the taskbar would stop hiding. Upon investigating the settings in GameVIsual inside Armory Crate, I discovered an OLED care section that had a setting to hide the windows taskbar. This was set to not hide it. So, every time that this profile was freshly applied upon restarting, this setting would also get changed.
Short explanation:
Armory Crate's GameVisual profiles' OLED care settings were overriding Windows on every restart.