macOS 12.3 introduces the new Camera Extension (CMIOExtension), which allows the third party apps to provide virtual media I/O device without running into the limitation like the existing DAL Plug-Ins. The document on this API is lacking right now, but Xcode 13.3 included the extension template with a working reference implementation.

Yeah it looks like for Core Media I/O extensions, the dynamic unload/reload is pretty broken (almost all updates require a reboot other than the initial load). If you want to ship it in production apps, try structure the extension so it behaves like a light weight shim to just pipe media data, and shift all the complicated logic to your main app with XPC to avoid having to frequently update the system extension?