I've recently manually updated to version 12 of DisplayFusion after putting it off for a while, and what I noticed is that it interferes pretty badly with Wallpaper Engine. I've disabled all wallpaper management from DisplayFusion a long time ago and double checked that they were still disabled, but it still seems to cause some kind of interference. It's being discussed actively in this Steam Discussion and I'm not the only one experiencing this issue.

The issue is that the wallpapers playlist flickers every 5 seconds a little aggressively, and always resets the wallpaper to the first in the list. Strangely enough, if the Wallpaper Engine app is not minimized, then this issue doesn't seem to happen.

The only real fix I've found so far is to downgrade back to version 11 for the time being.