Screen Sharing Macbook Pro on iMac - space bar no longer works correctly on Monterey using Magic Keyboard

I have been regularly using Screen Sharing from my Macbook Pro (13-inch 2020 i5) onto the large screen of my iMac (late 2015 27-inch i7). Having recently updated both devices to Monterey the 'space' bar no longer works correctly and pressing it twice consecutively appears to highlight a portion of text on the text editor in focus. Pressing Shift and 'space' seems to replicate the standard expected behaviour fine.

I am using the Magic Keyboard that came with the iMac (I do not have another keyboard to test this against currently) but the 'space' bar works fine directly on the iMac and this strange issue only appear when using Screen Sharing.

Has anyone else seen this issue?