Messages show unread SMS that are read

Suddenly on MBA M1 the unread status of SMS/iMessage stopped working. I can send/receive SMS/iMessage from MBA through iPhone, but then when I read message on iPhone it still is shown as unread in MBA. This is the problem only with this one device. Other devices get the statuses read/unread. I need to manually open or mark the message in MBA as read, otherwise I have lik 30-40 unread messages, some as old as two-three weeks in MBA. Is there a way to have this be in sync automatically, as it used to be?

Devices are up to date, Sonoma 14.5, iOS 17.5.1.