This is an issue I'm having with my Switch 2 (and only my Switch 2) as well. Seems like my capture card (EVGA XR1 Pro) is tonemapping when it shouldn't be. This same issue pops up in OBS, and I'm able to correct it there by setting the Video Format to P010 and the Color Space to Rec. 2100 (HLG). This seems to get the capture card to properly interpret the signal.
Unfortunately, the new image settings don't help since they're affecting an image that already has blown out highlights, meaning no amount of adjustment can recover them. A fix for this would require settings similar to those in OBS, I believe.
That said, this is a wonderful app you've made, and it's been quite useful to me even with the Switch 2 issue (which I don't believe is really an issue with the app so much as it's an issue with whatever settings the capture card defaults to).