I am not able to reproduce the issue any more upon updating to iOS 17.4. Can we get a confirmation if this issue has been fixed in 17.4?

That's good to know, which confirms my assumption. I hope we get a confirmation from an Apple engineer just so that we can be 100% certain.

What I ended up doing is that if the authorization status for contacts is set to limited, then when the observer of the UIApplicationDidBecomeActiveNotification is called, I perform a CNChangeHistoryFetchRequest (using the already cached starting token) and then I reset the cached contacts of the app, given that a CNChangeHistoryDropEverythingEvent is always included. It would be nice if we can get a confirmation that this is the proper way of handling the limited contact authorization.