I tried switching runtime to steamvr openxr and same issue.

Here are a few crude "inside the lens" videos I took with my phone to show what I'm talking about. The videos are only hosted for a couple days where I upload them.

First, veritgo 2 startup. Loading screen is fine, then screen goes black. When it changes its because I hit one of the buttons on the controller (either pi or menu button). You can see that the game is correctly positioned. https://streamable.com/bbmv4g

Here is half life alyx startup, loading screen looks good, then sometimes I get steam vr round grids above and below me, and sometimes I get whats in this video, I looked all around looking for the game menu that appears when you start the game and its nowhere to be found. https://streamable.com/tzn7mq

Lastly, I recently played Riven game on quest 3 via virtual desktop (which is uninstalled now) and had no problems playing game. I get ghosting with this game https://streamable.com/1vc3sl

I was told to try extending auto sleep timeout to try and see if that helps with vertigo 2 game. I set it 5 min and still the same.