UWP App activation error in offline scenario

Question

We have a sideloaded UWP app which has auto update enabled by referring this

<?xml version="1.0" encoding="utf-8"?>
<AppInstaller
    Uri="AppInstallerUri"
    Version="0.1.0.0" xmlns="http://schemas.microsoft.com/appx/appinstaller/2017/2">
    <MainBundle
        Name="BundleName"
        Version="0.1.0.0"
        Publisher="Publisher Name"
        Uri="bundleUri" />
    <Dependencies>
    <!--My dependencies-->
    </Dependencies>
    <UpdateSettings>
        <OnLaunch
            HoursBetweenUpdateChecks="24" />
    </UpdateSettings>
</AppInstaller>

While this works fine in any Windows 10 machine, App keeps crashing during activation in Windows 11 when it has no network connectivity. When network is connected, it works fine in Windows 11 as well. Checking the event viewer operation logs, it doesn't reveal much other than Windows Shell crash.

The description for Event ID 105 from source Microsoft-Windows-Immersive-Shell cannot be found. Either the component that raises this event is not installed on your local computer or the installation is corrupted. You can install or repair the component on the local computer.

If the event originated on another computer, the display information had to be saved with the event.

The following information was included with the event:

The message ID for the desired message could not be found

This issue is reproducible with a Sideloaded dummy blank app as well. Does anyone have any idea on this?

I've also attached a minimum reproducible sample. Source Code: https://github.com/Kumara-Krishnan/SampleApp App Installable: https://agreeable-tree-07b25dd00.1.azurestaticapps.net/ Steps to install: Download and install the certificate from additional links in Trusted people certificate store. Then Click on Get the app to download the .appinstaller file and double click to install the app.