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In 6.2.1, the very end of the style-instant-images/css file includes the following:
.wp-block {
padding: 0 !important
}
This breaks style controls for GenerateBlocks (in my case) but also actually just any theme/plugin that includes the ability to add padding to posts (which is probably every hybrid or FSE theme).
When we adjust padding on something, we expect to see something change, but instead nothing happens, as those padding values are being overridden with padding: 0 !important;
Could you see if you can replicate the issue? (My guess is that this is there for testing and was left in accidentally).