Steam games lagging for no apparent reason

Seems more driver/software(in the background) or even more hardware related then anything steam or your games.

Maybe if you did a gpu update, use ddu uninstaller, try going back a few, i started to get flickering after nvidia's latest update.

Mentioning your stats also helps, if you did anything new or added something new recently?

Had issues of lagging with Darkwood and a bit with Hollow Knight too. For my part it was the computer overheating that was causing these lags. In Hollow Knight I was able to reduce that by removing the blur. I know the blur is a feature of Octopath Traveler, maybe trying to lower this effect would get things better ?

There is a few softwares that would help you be sure everything is okay on your machine like CPUID HWMonitor or CrystalDiskInfo. If your hard drive is failing it can cause lagging in games, and those softwares might help you to see if anything is out of the ordinary on your machine, especially concerning your hardware.

https://www.techradar.com/news/new-windows-10-update-is-causing-a-whole-world-of-pain

Delete the update.

Hello again!
I tried the solution Lugum posted. It looked promising, but no, the games still lag. I did check if there are any other updates that would cause this and found that the one user Lugum linked KB5001330 and another one KB5000842 could be responsible for making my games lag. I uninstalled the KB5001330 and verified that my PC doesn't have KB5000842.

I restarted my PC and tried to run the games again, but still no luck. What is truly weird, that the games lag only from the shared library. Yesterday I played M&B Warband from my library and it didn't lag. I play other games that are not on Steam and they do not lag.
This is a bump and call for more help.

Have you scanned your computer with: AdwCleaner? It's a free scanner that removes even residential adware and such. You may also check(remove) temporary files/cookies with some kind of CCleaner or such. Do you have HDD or SSD? If you have HDD the fragmentation of the drive could also be a blame, as some files could be more fragmented, others less.
And Like Mayanaise pointed out, by shared library you mean family sharing games, or are you actually run some kind of server with shared library? If 2nd then there is your answer.

https://www.minitool.com/news/steam-lagging.html

There are several things you can try.

I had a lagging issue like this some time ago. Games like The Divison or Battlefront II would lag/stutter for no apparent reason, often coming to a halt for a couple of seconds.
Turning my anti-virus off (Trend Micro) solved everything.