I think there might be either some misconfiguration or corrupted package on your installation.
If you can, try to create a new user and log in to Plasma with that user. If the issue persists, I would tend more towards corrupted package or something like that.
New user account:
There is blur if the dialog box is in focus, (I think it blurs the entire background); there is no blur when it is not in focus.
in focus:
Yes when in focus the background is unfocused and therefore is configured to blur and the effect is slightly seen through the dialog box which is transparent.
But yes when in focus there is no blur.
There is probably some kind of package missing or misconfigured on your installed system.
This is your kvantum package name and version?
[🧱] × paru -Qi kvantum
Name : kvantum
Version : 1.1.3-1
Snapper is a great tool to restore ROOT (/) subvolume and get you out of most troubles, but it does not restore HOME (/home).
If you mess up, no matter how, your /home subvolume, snapper will not help.
That being said, in your case even creating a new user (which is basically what exists under /home) does not fix it.
Snapper is reliable to restore volumes but it is not impossible something went wrong during the restore process and corrupted one of your restores at some point. Snapper itself may not be the cause, but a simple CPU error, disk I/O error, RAM error, BTRFS error while restoring can cause huge issues or none at all. Earlier this week for some reason my CPU20 had a problem with some plasma libs and it caused many weird issues on my running system. I had to reboot and it’s working fine since. I thought it was my Firedragon being buggy but it was caused by hardware problem.
Yes it is possible the same happened to you during a restore process.