It is fairly common for Bluetooth to break on some kernel updates. Another user with a Mediatek BT adaper reported a BT breakage 3 days ago.
I asked him to post the bluetooth errors from his logs, but he has not responded. The most common fix when Bluetooth breaks on a kernel update has already been mentioned:
The first thing to always try is to test the LTS kernel if a kernel updare breaks your Bluetooth. It is also a good idea to test the linux-mainline kernel and headers. The mainline kernel always contains the most recent driver updates to correct any breakages to drivers that are included in the kernel. Mediatek WiFi and Bluetooth drivers are included in the Linux kernel, which is good because you don’t have to install proprietary drivers to get their adapters to work. Unfortunately, this also can result in breakages when changes occur with the kernel.
IMO it is far better (and safer) to use an alternate working kernel than to freeze the zen kernel and headers at an outdated version. Doing this results in a partial update, which is never recommended when using Arch Linux.