This update is for the Steam Deck Beta and Preview channels, and includes new features that are still being tested. You can opt into this in Settings > System > System Update Channel.
Note: This beta contains changes that were simultaneously released to SteamOS stable channel as 3.8.12, noted below
General
Updated Mesa graphics driver to a new major release, containing many ray-tracing performance improvements, as well as other performance and functionality improvements
Greatly improved VRAM management, improving performance and stability in cases where VRAM is limited
Fixed in 3.8.12
Fixed issue with Steam streaming in Desktop Mode in fullscreen games
Fixed a graphics driver issue where the main menu in Sniper Elite 5 would not render correctly
Fixed various issues with the SD Card reader on some Legion Go S models