Scrolling with the mouse wheel in Alt+Tab window to select a different app seems to work only if the mouse setting to "Scroll inactive windows when I hover over them" is off. DisplayFusion calls this setting "Allow the mouse wheel to scroll windows under the mouse cursor that are not in focus" and it is under Mouse management, but it seems to toggle the same setting in Windows settings.
I am running DisplayFusion Pro 12.0.1 on Windows 10 Pro 22H2 on my PC and I only noticed the issue recently, but I checked it on my laptop which is also still on Windows 10 Pro 22H2 but still has 11.1.1 on it and the issue is there as well.

Thank You Keith and the Team!
The scrolling now works, but if the mouse cursor is on any one of the window thumbnails, the scrolling stops working.