Going Windows (host) -> Linux (guest) works fine. It's only when Linux is the host that this is a problem.
Found the issue! I have to disable hardware decoding on the WINDOWS machine for this to work properly.
So it must be a problem with the recent nvidia windows driver?
I'm having this issue since today too. Only started happening after the update I got today.
Now running at build "Dec 16 2021, 22:39:26", Steam API: V020, Steam package versions: 1639697812.
In my case I'm streaming from linux host to linux PC.
When disabling hardware decoding it returns to normal.
Notably, the mouse cursor gets rendered correctly. Everything else is completely glitched. Opening a VNC connection shows it being rendered normally on the host PC.
Host: Debian Buster with RTX2070 and Nvidia driver 270.86
Client: Ubuntu 21.10 With Nvidia Quadro T1000 and nvidia-driver-270
Also tried on the client a purge of all nvidia* packages and reinstalling the nvidia-driver-270 package (and it's dependencies). Didn't help, same result.

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