It seems that the keybinding is processed by iTerm, as soon as I click away from Brave, the hotkey window's presence is as-expected by odd-even parity of hotkey invocations, but iTerm is no longer steals focus from Brave. Despite iTerm's state correctly tracking hotkey invocation, when I type, keyboard input is still received by Brave.
What might I check in macOS and Brave settings to diagnose or resolve this?
Original troubleshooting
Weird issue
iTerm hotkey binds stopped working.
- I updated to macOS 12.6.1 yesterday, and the hotkeys I configured in iTerm to open long-running terminal windows no longer worked outside the application, but only when focus is already on the application.
Resolved
By adding iTerm, in System Preferences, to Security & Privacy > Privacy > Input Monitoring. It worked before, so I'm unclear if a System Update (or a brew-managed iTerm upgrade, after I noticed breakage), or something else may have affected this. It's unclear if it 1) didn't have and didn't need this setting before, or 2) needed this setting, and had it, but app permission was removed with the macOS upgrade, or 3) something else.
New specific limitation
Hotkey bind now only fails to work when Brave Browser is in the foreground (alike in text editing and read-only tabs), but works with System Preferences, App Store, Notes, or Signal in focus.