SteamOS 3.8.9 Beta fixes Allow Tearing artifacts, 3.8 branch adds Linux 6.16 and wider handheld support
Small 3.8.9 update, larger 3.8 branch changes.

Valve has released SteamOS 3.8.9 Beta under the “Second Clutch” branch. The update is available through the Steam Deck Beta and Preview channels and includes changes still being tested before stable release.
The 3.8.9 update itself is small. Valve says it fixed a 3.8 regression where the “Allow Tearing” option could cause graphical artifacts beyond the expected tear line. The update also improves dynamic detection of HDMI audio channel count when a display or audio device is hotplugged. Valve also lists more stability and security updates.

Source: Steam
Wait for stable release, lots of changes coming
The full SteamOS 3.8 branch is much larger. Valve moved Desktop Mode from KDE Plasma 6.2.5 to Plasma 6.4.3 and now uses Wayland by default. X11 is still available through Steam developer settings or through “steamosctl”. Valve says this change fixes several cases where Desktop Mode had lower performance than Game Mode.
SteamOS 3.8 also updates the system base and graphics stack. The branch includes an updated Arch base, updated graphics drivers, and Linux kernel 6.16. Valve also added preliminary HDMI VRR support for devices with native HDMI output, improved VRR frame pacing, fixed an FSR overlay badge issue, and improved support for Game Mode screencasts such as OBS and Discord.
The branch also expands SteamOS support beyond Steam Deck. Valve lists initial support for upcoming Steam Machine hardware, better compatibility with recent Intel and AMD platforms, improved video memory management on systems with discrete GPUs, and firmware for upcoming Intel handhelds. The update also adds or improves controller support for devices such as Lenovo Legion Go 2, OneXPlayer X1, GPD Win 5, GPD Win Mini, OrangePi NEO, MSI Claw devices and ASUS ROG Xbox Ally systems.
Source: Valve