Since this is not technically a bug report it's gonna be resolved as invalid.
For troubleshooting, there are many things that can cause an audio error, make sure your system sounds are on and that Minecraft/Java isn't specifically set to a low value. Make sure your in game sounds are on and make sure it's not a resource pack that has sounds removed for some reason. Then make sure your output device is set correctly in it's accidentally been set to some other device. If all else fails try to restart your computer.
Two things:
You have set the version for this report to be in 1.17.1, however in the second screenshot (menu.png) it says 1.16.5.
Also Minecraft doesn't technically handle how your cursor is rendered, this could be an issue of some other window grabbing the cursor or similar. Try to close all other applications you have and see if simple thing like full screening fixes this.
Cannot reproduce this error on all my years of playing Minecraft. This is most likely invalid.
For troubleshooting, have you possibly changed your Minecraft directory or moved the world out of the folder?
Is this not just quasi connectivity?
Here is a list of things ruined by this being fixed:
Gold/XP farms- there will now be no way for a player in vanilla to afk gain XP
Ice farms - most modern designs require a zombified piglin farm to keep pickaxes alive.
Mending - at least from a tech standpoint, it might be easier to trade with villagers as opposed to repairs at some other type of XP farm due to the requirement of hitting the mob. Also forcing you to eat every so often therefore making it impossible to afk either.
Honestly it's very shocking that this has not been marked as WAI or WF given that it has existed and been used since 2014. This also means that there will now be a very compelling reason to stay in 1.15.2 given that this is now fixed and MC-183931 is still broken. It makes near all nether based farms quite useless.
In my opinion, one of the worst things that has ever happened to the tech community was 1.13 because then there was a split with tech servers where some wanted to use 1.12 and some wanted to be on latest. This was near fixed with 1.15 with major tech servers finally making plans to upgrade. But now with the state of the game, 1.15 will become the major tech version and the tech community will be split again.
In the end, this being fixed will only harm tech players and do literally nothing negative for casual players.
I'll try to keep this comment updated with anything else that will be ruined by this fix.
I cannot reproduce this in 1.17.1 single player.