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I really need others to try it out to know for sure though.
Hopefully this is just temporary, until it is patched.
Making XSO launch with administrative privileges fixed it, but now closing SteamVR and launching it again XSO would appear broken.
After looking into it, I found that it leaves a single task running named "XSOverlay Media Manager.exe". Killing said task and restarting XSO fixes it for me.
Yeah, that's exactly it. You might notice an "invisible" window on your hand if you point your pointer where XS overlay is supposed to be.
I believe in my situation, it can even corrupt the config file if you don't close it before you exit steam VR.
As far as I can tell it doesn't corrupt anything for me, just doesn't close the task and fails to initiate correctly if said task is still running after previous launch.
So this is quite different. I just need to kill the task and everything works fine.
https://imgur.com/a/NCTj6rA
Alternatively, you can make a text file (renamed to .bat) and type:
tasklist
taskkill/im XSOMediaManager.exe
And then just run it anytime you want to end the task.
Here's a workaround that actually works: https://github.com/Xiexe/XSOverlay-Issue-Tracker/issues/322#issuecomment-2450577421