It sometimes takes time for OBS Studio to find the game capture window in the selection. Try to reassign that in the "Properties for 'Discovery Windowed'" menu the same way you did before, but wait a minute before closing that sub-menu. That might work.
If that doesn't work, I don't really know why. Maybe google can help, or using the non-studio version of OBS, which is what I still use over Studio except when streaming. Maybe for some reason the red frames are only 1x1 pixels wide in the capture window. Try to resize that to the full screen, too, maybe that helps. Talking about the red frames in the main screen of OBS Studio, those are in the upper left corner of the capture in your screenshot.