Updating Netty breaks custom_payload on 1.20.5

When updating the Netty library from the bundled 4.1.97 version to 4.1.109 or higher, Opening any worlds in Minecraft Java 1.20.5 will cause connectivity to immediately drop regardless of singleplayer with an error message saying that 14 bytes extra in minecraft:custom_payload packet was found - This issue does not occur when going back to Minecraft Java 1.20.4 or older.

This can be reproduced on both vanilla launcher and modded launchers that allow updating libraries as desired.

Screenshot of the error message after updating Netty: