Cannot pause a screen recording in Mac OS 12

I don't think this was ever possible.

As far as I can tell from reading these posts, there is a misunderstanding in that the question is about Screen Recording, and the answer is about Movie Recording.

When you do a screen recording, the Stop button appears in the menu bar, and that is the default way to stop the recording. There never was a way to pause, AFAIK. This is the same as if you do Command-Shift-5 and choose one of the recording options.

On the other hand, when you do File->New Movie Recording, you are recording from a camera (it can be the built-in camera on your mac, or a camera attached to it, like the old DV cameras connected via Firewire). In this situation, the record button appears in the middle of the window, and turns into a stop button. It is this button that becomes a pause button when holding the Option key.