Flickering and freezing

My game is acting weird and is performing. I tried to get help at Discord. After a couple of diagnosis steps that did not fix the issue, I was directed to support. Support then directed me here saying it is a bug. The game often flickers and flashes black. When Alt-Tabbing the game freezes but runs in the background on the newest version and below. When I tried older versions (1.8.9) the game somewhat worked. But it flickers too and it seems like stuttering. When I move the mouse it moves at its normal speed but sometimes slows down or speeds up while also stuttering.

 

This issue happends on both monitors.

What was done and tried:

• Reboot
• Reinstall of java
• Reinstall all launchers
• Reinstall GPU drivers (Completely clean via DDU)
• SFC scan
• Running the game in a clean boot environment
• Trying other monitors, cables, ports on gpu

The performance and flickering worsen when a lot of chunks (render distance) are loaded.

It does not flicker when VSYNC is off OR if the VSYNC is on but the fps are cappend below the refresh rate (60fps) once it is above or equals it flickers.

This PC is new.
Everything is tested in vanilla MC and official launcher. 

And this issue was not showing previously. The system also has more then enough disk space and performance headroom.

The issue appears both in fullscreen and in windowed mode. 

Showcase of the issue: https://drive.google.com/file/d/1z9Aj0pu0RgxMx9YuDPYGIKafLCzMNquh/view?usp=sharing

Issue is best seen here throught the end of the vid. https://drive.google.com/file/d/1Hx4M7tT5xr3F8WIOU482JT4_l99Ejnd5/view?usp=sharing

Note: This is a referance/remake of MC-270487 but with couple more details and more research.