According to Microsoft's updated Windows 11 Health Dashboard, an issue with the WVC1 (VC-1) codec that was present in Windows 11 version 22H2 23H2 has been resolved.
The initial issue arose in June 2023, when Windows 11 received update KB5027303, and after installing the update, some applications that need to call the VC-1 codec were abnormal, unable to record screens or webcams, etc.
Given the scope of the issue, Microsoft used Kir, a known issue rollback, to remove changes to the VC-1 codec and then fix it.
As of this month, Microsoft said it had completely addressed the issue with the preview update KB5034204 released in January, and the content included in the preview update was also available in the February cumulative update KB5034765, which is now available to all users.
Considering that Windows 11 version 23H2 shares the same infrastructure as version 22H2, the issue has also been resolved in Windows 11 version 23H2.
It doesn't matter if you update or not, as Microsoft has already rolled back and now fixed the problem completely with cumulative updates, but if you install an update it will help improve the performance of the VC-1 codec.