Has the max length of "record what happened" clips been reduced to 1 minute, or is it a bug?

If you use an external drive as the capture location, you can record footage at 1080p that's way longer than 1 minute, but it has 2 important limitations.

1. You have to start and stop the recording manually. You can't use the "record that" feature to capture longer clips of something that just happened; that would still be limited to 1 minute at 1080p.

2. Clips captured on external storage cannot be shared over Xbox Live.

I think it's a good solution if you're recording footage to transfer over to a PC, edit, then upload to YouTube, but it's no good if you want to capture longer clips to share with friends over Xbox Live.

I wonder why they reduced the recording times though. I'm sure when I got my Xbox Series X, there was a 2 minute option for 1080p, but now, as you said, it's only 1 minute.

I'm not sure exactly when 4K recordings stopped working properly because I switched back to 1080P recordings for the longer clip length of 1 or 2 minutes on my Project Scorpio Xbox One X.

The 4K clips may be broken now because they might have made a change in the way that they are captured and/or prepared. Now there is a notification that the clip is being prepared which I don't remember previously (they might have just been captured originally,
this step doesn't happen for 1080P clips). The 4K preparing process may be what is broken in the newer Dashboard releases.

Unfortunately I have not yet seen an updated Dashboard release that fixes the 4K clip issue.

Go to your capture settings and change the record what happened to 5 minutes. If you press start recording it lasts way longer. Record what happened is for short clips only. Starting a recording has a longer duration.

There's no reason why the quality would have to be reduced just because they allowed you to record longer clips. There's already an area of the hard drive reserved for game clips that can hold a ton of them. If they increased the time limit to 15 minutes,
it would just reduce the total number of clips you could store (locally) before you had to start deleting them, assuming you were recording 15 minute clips otherwise it would be no different to how it is now.

Im trying to record game clips on my xbox and the xbox records the wrong things, eg i should be recording a 15 second long clip but it is showing it as 6 seconds not the full length

Hi!
You can change the length of the clips to be recorded in the settings.
If you want longer clips I recommend increasing the time to maybe 30 seconds.
I hope to have been of help, if you have other questions ask me as well!