Adding a data point to confirm this is affecting other third-party software too, not just the original reporter's app.
Summary: KB5124008 (Windows 11 24H2/25H2, build 26200.9445) and KB5124012 (ARM64, build 28000.2954) break Plan9/virtiofs host-folder mounting for Hyper-V-based sandbox VMs.
Details: After installing this update, applications that use Hyper-V sandbox VMs with Plan9/virtiofs shared folders (in my case, Claude Desktop's "Cowork" local sandbox feature) can no longer mount the host's shared drives inside the guest VM.
Host-side: HcsModifyComputeSystem returns success (hr=0x0) for each share. Guest-side: the mount still fails with "Plan9 mount failed: invalid argument" (x64) or completes with zero shares actually attached, no error returned (ARM64/KB5124012). Affected components appear to be vmcompute.exe, vmwp.exe, p9np.dll, and p9rdr.sys. WSL2 is unaffected, only Hyper-V-based Plan9/virtiofs sandbox mounts fail. Confirmed via A/B rollback on multiple machines: uninstalling the KB restores functionality, reinstalling it reproduces the failure. Reboots, folder re-selection, and clean reinstalls of the affected app do not help.
Impact: any Hyper-V-based sandbox relying on Plan9/virtiofs host-folder sharing is completely broken on affected builds.
Other reports of the same regression: github.com/anthropics/claude-code/issues/92984, github.com/anthropics/claude-code/issues/92958, github.com/anthropics/claude-code/issues/93442
Hoang Le's answer above matches what I'm seeing. Adding this so the servicing team has visibility that it's affecting more than one product, hopefully that helps prioritize it for the next cumulative update.