I had the exact same issue as your original post, until I disabled the OpenXR Toolkit. The developer is no longer supporting it, and it looks like something from the last few months (be it steamvr, DCS, or otherwise) broke it. I gathered there's others that can still use it fine, but unfortunately I'm not sure it's an option for Index users anymore.
There is a tool called quad-views-fovated by the same developer, which provides an even better version of the fovated rendering, but it broke the Steam motion smoothing. For now I've just resigned to not having the fovated rendering and CAS sharpening.