FWIW I updated to 12.2.12.1 (miniserver v1) yesterday and not seeing this issue at all.
TCP and HTTP virtual outputs all seem to be working as well as they ever did, sub second latency. (I don't have any loopback virtual outputs though)
Where exactly does that debug log message appear? I've not seen anything like that before. (Maybe I don't have the miniserver debug log set very high? I try and minimise use of metric/logging that might cause it extra writes to SD card).
Just thinking out loud... What is IP 10.1.1.1 on the network? I'm guessing it's your switch/router. Why does that debug message talk about ARP and TCP in one statement? are you expecting inbound TCP requests from the router? What do you see if you run "arp 10.1.1.1" from some other (linux) box? I'm guessing the 10.1.1.20 is the miniserver, so is there some weirdness that it's lost the route to itself on that addr and needing to send through the default gateway... still shouldn't be so slow though.
Hate to be that guy, but have you tried turning it off and on again? I've occasionally seen a hard power cycle is needed if the miniserver TCP stack gets into a weird state after reprogramming [normally manifests as inbound UDP packets not being delivered]
Sorry, probably not a lot of help!