I have started to use OneNote again after about six months of not using it. After doing some troubleshooting, I have determined that the "Ignore Touch input when I'm using my pen", the successor to "palm rejection" setting in Windows 11 for OneNote isn't working. I was able to reproduce the issue in OneNote for Home, OneNote for Business, and OneNote for Education.
I had a chat with support about the issue. The support agent, Ailene, pointed me here. You can see our conversation using the case number, '1039882233'.
I hope y'all will be able to solve this issue.