It is not a bug it’s a feature.
Hardware (DDC/CI) vs. Software (OS only) brightness control.
From how I understand it, basically with Hardware brightness switching, usually the “default” for SDR monitors, the brightness value is stored in your monitor and that memory has only a finite number of writes (don’t known maybe 100000 or 1000000 change cycles) depending on the IC manufacturer until that memory dies. For that reason, to increase the monitor lifetime, the smoothly transition feature was deliberately removed.
Have to search the old thread about that topic.
Edit: Brightness changes on Wayland no longer fade smoothly after KDE 6.1 - #4 by digitaltrails
But as I said in that thread, if “Control hardware brightness with DDC/CI” is disabled in the settings and it does not (allow to) transition smoothly I would consider that a bug.