Timeline Playback stuttering/skipping only when rendered?

I can drag 4k clips into my timeline, trim, add effects, etc.. and the playback runs perfectly smooth. As soon as the timeline or clips render, the playback starts to stutter and skip. Playback is impossible once clips on timeline are rendered. I've tried optimized, proxy, selecting "Better Performance" during playback. Nothing helps.

Mac Studio M2 Ultra, 128gb. I don't think it's a hardware issue. I've tried troubleshooting via videos and forums and hit a wall. I've tried uninstalling and reinstalling FCP. I've tried creating a new user on the computer w a fresh Final Cut install. Tried new libraries, library on HD, library on SSD, etc.

I suppose I could turn off background rendering and essentially bring the project to its final state before allowing any rendering, but I feel like that shouldn't be necessary. Anyone have any suggestions?