Hardware acceleration stopped working after latest NVIDIA drivers in wayland

Problem:
When “Preferred Ozone platform” is set to auto/wayland and “Hardware acceleration” is enabled.
The browser takes very long to start.
and following is logged:

[6331:6331:0629/175525.107371:ERROR:gpu_process_host.cc(1002)] GPU process exited unexpectedly: exit_code=512
[6576:1:0629/175555.473408:ERROR:command_buffer_proxy_impl.cc(325)] GPU state invalid after WaitForGetOffsetInRange.
[6331:6331:0629/175555.480435:ERROR:gpu_process_host.cc(1002)] GPU process exited unexpectedly: exit_code=512
[6331:6331:0629/175625.805162:ERROR:gpu_process_host.cc(1002)] GPU process exited unexpectedly: exit_code=512
[6443:7:0629/175626.135896:ERROR:command_buffer_proxy_impl.cc(132)] ContextResult::kTransientFailure: Failed to send GpuControl.CreateCommandBuffer.
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[7000:7018:0629/180338.679509:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.679729:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.679913:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680104:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680271:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680445:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680635:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680805:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.
[7000:7018:0629/180338.680976:ERROR:shared_image_manager.cc(326)] SharedImageManager::ProduceMemory: Trying to Produce a Memory representation from a non-existent mailbox.

and the visuals are broken

Without Preferred Ozone platform set to wayland
everything works fine.

with wayland and no hardware acceleration everything works fine as well

I tried downgrading nvidia.
A certain version of nvidia works with both.

But after downgrading it the nvidia nvidia_modeset nvidia_uvm nvidia_drm are not detected and kernel panic occurs

Current drivers

nvidia-dkms 555.58-1
linux-zen 6.9.7.zen1-1
linux-zen-headers 6.9.7.zen1-1