The bug
When the loading icon is displayed (when the Launcher is opened or when the user attempts to add a new Microsoft account), the dark background's size is restrained to the size of the icon, rather than covering the entire window.
In previous versions, this dark background would cover the entire window, indicating that interacting with the buttons and fields within the Launcher (ordered behind the icon) was not possible.
Additionally, as the icon's animation plays, the background size changes with it (see this video).
How to reproduce
Open the Launcher
❌ The loading icon's background does not cover the entire LauncherNavigate to Settings -> Accounts and click the Add Microsoft account button
Focus the main Launcher window
❌ The loading icon's background does not cover the entire Launcher
I can also confirm this behavior in 2.3.173 (Windows).