Yes, you are correct, there appears to be a bug with the Lakehouse.Contents function in the latest Power BI Desktop update (July 2025). Multiple users have reported that Lakehouse.Contents, which previously worked, now throws errors. This issue is new in the July 2025 release and is not present in earlier versions like June 2025.
Workarounds:
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Use the previous version: Uninstall the July version and install the June 2025 version from the official Power BI Desktop archive.
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SQL endpoint: As you mentioned, you can use the SQL endpoint, though it may require adjusting queries and isn’t as straightforward.