Please reopen this issue as the bug has not been fully fixed. (Issue still persists)
I would like to add that this was working in earlier versions of the game, before Better Together was a thing.
Fair, but the only way you could possibly fix it is by making the crosshair actually move whenever the damage tilt is active, practically making you miss and giving a huge disadvantage to players who have the damage tilt slider to the max. Plus it would look ugly and not be helpful or pleasing for players.
The damage tilt is supposed to tilt AWAY from where you are looking (to the direction you were hit), so obviously it wouldn't be where your cursor would be during the animation. The only reason this wasn't an issue before 1.19.4 was because the tilt was only affecting the X position.
I'm not saying that just because it is low priority that it would never be fixed, I'm just thinking it doesn't make sense to "fix" it when there is really no issue here. The only possible solution is what I mentioned, or by reverting the damage tilt fix entirely, thus making this impossible to even fix.
TL;DR: There is no way to "fix" it, so just turn the slider down to your liking.
Cannot reproduce in 1.20.1.
I wouldn't really consider this a bug as there is no real way to fix it without reverting the damage tilt fix entirely. Plus, there's a slider to turn it down, so it's not really an issue.
Can confirm in 23w06a.
My mistake, thought it was the Bedrock Preview UI because they look similar. I can reproduce this issue with any resource pack though.