I've updated my answer to this on StackOverflow with the conventional use of .sheet, if that helps.

In response to your second question—how else do you intend for it to work, if not for presenting with .sheet? As far as I'm aware of, that's the only situation in which the bug occurs—as it doesn't seem to happen when using a .fullScreenCover.

Ah my bad—that usage of an enum named Sheet to represent the possible sheets is specific to my case. I should have used a simpler example to explain how to use this. In the conventional case of using @State var showingSheet: Bool = false, you would then have something like func showingSheetChanged(to newValue: Bool) { TapTargetResetLayer.presentedSheetChanged(toDismissed: newValue == false) }. The point being to let it know when the sheet dismisses so it can do its thing.