Same issue submitted since first Beta version 12. Have Apple bluetooth and USB keyboards. Tab will not tab from cell to cell or section to section in Excel desktop, or any online form.
Space bar does not scroll pages. Rather, it opens program window to full screen zoom.
Menu bar Bluetooth recognizes keyboard. Pref file can never find it. Monterey is useless without properly functioning keyboard. Tried resetting actions. No luck.
Help appreciated.
Same thing with me since Beta 3 on an M1 mini. Thought it was first because of using ARD to run Parallels and was having tab/spacebar issues when doing that with everything in Parallels. Now at beta 5 arm and spacebar randomly not working. Will work with Notes, and Mi, but won't work in Excel or various screens in Parallels, at the same time In Parallels the space bar pops up the configuration menu. in beta 5 the spacebar is completely unusable for quick look, it causes a blue box to appear around the finder window. So, for me, Quick Look is totally unoperable.
Thought it was my KVM, but bypassing that didn't solve anything. Thought it was my Kensington keyboard and was due to my option & command keys needing to be remapped, but that wasn't it. Put back on an plain old ordinary USB Apple keyboard, but the same things happen with it too. Only thing I can do is to do when it happens is to do shift-spacebar to get spaces going.
I'm experiencing the same behavior as pcolvin15. Running Monterey 12.1 on a 27" iMac with 64GB of RAM. Occasionally (too frequently) the spacebar will not make a space. It causes a blue box to appear around the finder window. This doesn't occur in all app but does occur in Facebook and the Apple Email client. I'm using the default keyboard, mouse and trackpad that came with the iMac, plugged into the thunderbolt port except for the wireless mouse. Sometimes a reboot will solve the problem, but only temporarily.