I have the exact same bug, using Xorg.  VM worked until updated to
Jammy, now shows just like in OP's video:  Launcher is drawn fully, but
only the top left part of the background draws.  Dragging windows in
working portion of screen with mouse doesn't work.

The paravirtualization setting has no effect, in my experience - tried
every setting and system persists to show the issue.

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https://bugs.launchpad.net/bugs/1971010

Title:
  [vmwgfx] Screen and mouse doesn't work in VirtualBox when
  paravirtualization is enabled

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