Hey everyone, I've also just experienced this issue after upgrading to macOS 26. So a few things. I am nearly certain this is not due to the cable. Everything was working as it should before the upgrade. The issue appears to occur with USB-C connected monitors, particularly when using a docking station.
Here's how I reproduce the issue. When I use my Mabook in clamshell mode, it functions as expected. Now, if I unplug the dock and then use the laptop with nothing else connected, it works. But when I replug the Dock into the computer, that's where I get issues.
A few things I've tested: unplugging and replugging the monitors - no go.
Unplugging the Dock and replugging that in, no go. Plugging in the USB-C monitor directly to my MacBook Pro M1 Max, and still no go.
** In that Dock, I have an external USB HD connected, as well as other USB components, and if the monitors don't come into play, the drives do not show up either, so nothing is recongnized.
A few things that work, and a tentative solution until Apple resolves this issue. Plugging the monitor directly into the MacBook Pro M1's HDMI port works flawlessly. Additionally, for me, rebooting the Mac resolves the issue until I perform the above step, which is unplugging, which I do because I work at different locations.
I'm not an Engineer, nor do I play one on the Internet, but somehow the signal that checks if something is connected to USB after waking from sleep has a hiccup in it. The issue only occurs when I remove the USB-C cable, use the computer, and then reinsert it into the system.
Oh, before someone asks, I've tried all three of the USB-C connectors on my MacBook Pro. I've tried it without the Dock, and I have also tried it with other monitors I have connected to my other Mac in my home office. This issue occurs only on my MacBook Pro and only when I switch from clamshell (or open) mode to using only the laptop screen, then back to the external monitors. (And as I said, my bandaid fix is to reboot, but what a pain in the you know where)
Now that I can reproduce it, I'm writing up a bug report for Apple. Good luck, everyone!