Update on the issue from my side.

I've now upgraded to the latest version version 12.0.427 (Windows) as well as Nvidia drivers 461.72.

The cursor flickering is now gone within the preview window, moving the mouse across it the mouse icon now remains properly as the selected tool icon.

It does still flicker while moving the mouse across any of the docked windows title bar (where you could click to drag&move the window to a new position).