Does the iOS 17 update decrease the radiation level in my iPhone 12?

There is nothing in the release notes for iOS 17 to suggest it does anything about the normal levels of radiation in any iPhone. The controversy over iPhone 12 was ridiculous to begin with. iPhone 12 has met all normal radiation tests, but for some reason, the French Government issued a warning last year, which Apple immediately addressed with an update, which satisfied the French Government (the ONLY government on the planet who had any issue to begin with). As long as you update your iPhone when updates are released, you have nothing to be concerned about.

Understanding iPhone 12 and SAR testing in France - Apple Support

"For more than a decade, iPhones have had an off-body detection feature that allows for slightly higher transmit power when you set the phone down, for example, on a table. This has been thoroughly tested and verified internationally to be an effective mechanism to comply with SAR requirements. The slightly higher power is not applicable to SAR compliance since the phone is on the table, not on your body.

The ANFR was using a testing protocol that does not account for this off-body detection mechanism, thereby not allowing a slight increase in power when it is appropriate. So for users in France, we have released a software update that turns off this feature to accommodate this test protocol."

WIRED – The iPhone 12 Isn't the Only Phone to Fail France's Radiation Test

"Samsung, Motorola, and other phone makers have exceeded the limits that caused France to ban the iPhone 12."

"Some 50 phones are listed on the ANFR database as having failed the regulator’s testing to date."