I regularly connect to a Windows 10 Enterprise (1909) desktop using three monitors from my macOS 12 laptop. Last night the AppStore updated Microsoft Remote Desktop to version 10.7.4 and now it not longer works when "Use all monitors" is turned on. When I connect it loads on only one monitor with a resolution of 1024x768. If I turn off "Use all monitors" I get full resolution on one monitor.
To make sure it is not my laptop I downloaded the beta version of 10.7.3 from https://install.appcenter.ms/orgs/rdmacios-k2vy/apps/microsoft-remote-desktop-for-mac/distribution_groups/all-users-of-microsoft-remote-desktop-for-mac and confirmed that is worked correctly with that version.