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?

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.