I also updated Mullvad VPN now, and the VPN stopped working for me too until phone reboot, but leak protection remains enabled and seemingly enforced all the time, as apps weren't able to reach internet until phone reboot.
Might be that something broke in a recent GrapheneOS or AOSP release, and that loaded VPN settings are not cleaned up properly at VPN app restart anymore. I think this warrants looking further into. Should be possible to do relatively easy on a developer build. Just to understand better what is going on and whether there might be security implications or not.
Maybe the serious leak issues appears only then the VPN settings break in a multiple-profiles-using-VPN-apps setup, possibly when different VPN apps are used in different profiles, or when some profiles are shut down when it breaks but later started or such.
I have no ability to look into this myself now, but I add it to my list.