Anyone observing the same issue? All files created with GPO preferences in replace mode are having 0 kb. Doesn’t matter if these are newly created links or files copied to a machine with GPO preferences.
Uninstalling KB5017308 or changing replace to update resolves the issue!
I have found a discussion regarding this issue here: https://answers.microsoft.com/en-us/windows/forum/all/windows-10-update-kb5017308-breaks-shortcuts/67156263-7536-44d1-a9d8-f93d18b8941c