External monitor connected via TBT Type-C to a Dell Docking station is not detected

I have the following setup:

• Windows 11
• Dell XPS 9710 laptop connected via Thunderbolt 4 to Dell WD22TB4 docking station
• 2 4k monitors connected to the docking - 1st via DP, 2nd via TBT Type-C (the one connected via TBT Type-C is not detected)
• Direct Graphics Controller Direct Output Mode is turned on in BIOS to give full control to NVIDIA GeForce RTX 3060 Max-Q, when this mode is turned off the bug disappears, but I need this mode to be on.

This setup worked flawlessly until I updated to the recent NVIDIA driver version. Now the 2nd monitor is not detected by Windows even in the device manager. It is displayed in "NVIDIA Control Panel -> Set up multiple displays" as inactive, however it cannot be selected https://ibb.co/9cgzC9v . The only way I found to get it detected by Windows is to use "Configure Surround, PhysX" - turn on "span" feature, then turn it off and the second monitor remains detected by NVIDIA and Windows until I restart the laptop. I need to repeat this procedure every time after the restart. Clean driver install did not solve the problem.

This problem occurs in all 517.48+ nvidia driver versions so I have to use the last stable version 512.96. Reported to NVIDIA, no response.