Plex no longer HW transcodes

After the upgrade from 6.11.5 to 6.12.X (on 6.12.10 now) everything worked just fine including the Plex, mind you I never tried to convert the quality, always played the original quality and it worked no problem.

I just tried to downgrade the quality of a movie, and it stops playing. after a min or two it throws an error msg on the client side - plex unknown error occurred 4294967279

All this time the Plex server is reporting all is well and it's transcoding yet it's not playing on the client side:

Transcoding is enabled of course. Nothing really changed other than the upgrade. The settings inside the Plex container stayed the same, I do have:

/dev/dri 

I am using linuxserver template, have been since day1 and it worked flawless. 

CoffeeLake-S GT2 [UHD Graphics 630]

Not sure how to proceed here? I tried restarting Unraid server. Restarted the docker still no luck. It just doesn't seem to be playing anything if I change the video quality to anything other then the original. Weird issue or what? 

Any help is much appreciated.

BTW there are some errors in the Plex Log file:

May 03, 2024 07:42:58.000 [23395542666040] ERROR - [Req#15754/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] [eac3_eae @ 0x14b3a1ee4ac0] EAE timeout! EAE not running, or wrong folder? Could not read '/tmp/pms-1c5474fc-05a4-4e14-868f-f2de87162dc3/EasyAudioEncoder/Convert to WAV (to 8ch or less)/eoqeqk7fd5f4lzu8lu4xtrvb_8095-0-0.wav'
May 03, 2024 07:42:58.000 [23395542666040] ERROR - [Req#1575b/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] [eac3_eae @ 0x14b3a1ee4ac0] error reading output: -5 (I/O error)
May 03, 2024 07:42:58.001 [23395542666040] ERROR - [Req#1575c/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] Error while decoding stream #0:1: I/O error
May 03, 2024 07:42:58.378 [23395452123960] DEBUG - Content-Length is -1 (of total: -1).
May 03, 2024 07:42:58.378 [23395537922872] DEBUG - [TranscodeOutputStream] Input processing thread started at offset 0 for -1 bytes.
May 03, 2024 07:43:03.000 [23395542666040] ERROR - [Req#1575d/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] [eac3_eae @ 0x14b3a1ee4ac0] EAE timeout! EAE not running, or wrong folder? Could not read '/tmp/pms-1c5474fc-05a4-4e14-868f-f2de87162dc3/EasyAudioEncoder/Convert to WAV (to 8ch or less)/eoqeqk7fd5f4lzu8lu4xtrvb_8095-0-1.wav'
May 03, 2024 07:43:03.000 [23395452123960] ERROR - [Req#1575e/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] [eac3_eae @ 0x14b3a1ee4ac0] error reading output: -5 (I/O error)
May 03, 2024 07:43:03.000 [23395542666040] ERROR - [Req#1575f/Transcode/eoqeqk7fd5f4lzu8lu4xtrvb/e19145de-0bb0-4c9b-8b45-d4971eeb029b] Error while decoding stream #0:1: I/O error