On 6.9.2 I was passing through my onboard Bluetooth Controller on my Asus B550 Strix-E which was working fine, however since updating to 6.10.0-RC1 I am no longer able to do. It works fine in BM on Windows 10 but throws up a Code 10 in a Windows 10 VM and doesn't let me enable Bluetooth in a PopOS VM.
It's picked up as "Intel Corp. (8087:0029)" when trying to passthrough and is twinned with the onboard WiFi 6 (which I have disabled as I don't use it).
The solution is a lot simpler.
Linux (unRaid) is somehow blocking the device on the host.
I found out that you can unload the bluetooth drivers and it works now inside the VM.
modprobe -r btusb
modprobe -r bluetooth
If you want that it persistent between reboot, you have to blacklist these drivers.
Normally it is /etc/modprobe.d/ but unRaid does not replace the initial root filesystem (initrd / rootfs) with a block device so changes where are not persistent.
In some ot