SharePoint - Stop sharing - new behavior or new bug?

For the accidental share, do not use Stop sharing as the first repair. A site owner should open Manage access on the file, expand Links and Direct access, identify the link or person that was added by mistake, and remove only that entry. That preserves the other intended permissions and avoids the result you observed where nearly everyone disappears.

Afterward, check whether the item should inherit from the library. If it no longer needs any unique permissions, open Advanced permissions for the item and choose Delete unique permissions so the parent library permissions are inherited again. Compare the resulting groups and users with another file in the same folder before closing the incident.

The greyed button can be consistent with the contributor lacking Manage Permissions even though the sharing UI previously let that user create a link. What needs escalation is the asymmetric workflow: a contributor can create a mistaken share but cannot revoke that exact grant. Capture the sharing setting from Site permissions, the contributor's effective permission level, and whether the grant was a sharing link or direct access, then submit those details to Microsoft 365 support. The audit log can confirm who created and removed the link without relying on memory.