For those still interested in this thread, I think I have isolated and located the main issue causing this error message:
1. After extensive hardware and malware diagnostics this week with a computer professional, we have ruled out these things as issues, everything checks out fine.
2. I then ran into this thread on reddit which seemed very interesting:
https://www.reddit.com/r/WindowsHelp/comments/1aeau3s/explorerexe_application_error_popup/So taking advice from that thread and after running many many different tests, I was able to fix this error consistently and only by disabling GAME INPUT HOST SERVICES from the taskbar menu
So it appears that the recent Windows update has conflicted with this Microsoft Gaming App and caused this error message, I am convinced that they need to fix this with their next Windows update. This latest update was even supposed to address similar issues but obviously failed.
Does anyone know how Game Input Host Services becomes active or installed in the first place?
I am pretty sure that Game Input Host Services is related to both the Xbox App and the Xbox Controllers, so I'm not sure if it was installed in one of those ways or it comes already with Windows 11.
In the meanwhile, I don't want to disable Game Input Host Services every time I shut down or restart, does anyone have any other interesting ideas for fixes based on what I've said here?