FF14 crashing & freezing other windows

I cannot play FF14 with friends through Discord or anything as while I am playing FF14, any non-active windows either freezes or crashes.

For example:
- YouTube videos would not play and audio would play for a short bit before it freezes entirely. If I click on that browser window, the video resume but if I alt-tab back into the game, it freezes again
- Discord freezes and crashes making it unplayable with friends
- Spotify would become unresponsive until I click on it again

I've tried the following:
- Change between windows, borderless and full screen mode - none fixed it
- Changed graphic settings
- Turned on/off Windows 11 game focus mode
- Turning off hardware acceleration on Discord is a partial fix: Discord doesn't crash no more but now it stutters.

What fixes it temporarily:
- Reinstalling the game but on next launch it resumes with the same issue.

How do I fix this?

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Spec:
- FF14 Steam version
- Windows 11 Home 64-bit
- 13th Gen Intel(R) Core(TM) i9-13900KS (32 CPUs), ~3.2GHz
- 64gb ram
- DX 12
- NVIDIA GeForce GTX 1070 8Gb

Greetings JooHyun,

We apologize for any inconvenience experienced when trying to play Final Fantasy XIV. For us to better assist you, please respond with the following information:

- Error Codes or Messages (If any):
- Other programs running while the game is playing:
- Frequency at which error occurs:
- Any other steps taken to resolve the issue:

We would also like to request for a system report. This can be generated by opening the launcher and going to the 'Config' option on the Final Fantasy XIV launcher and to the right of 'System Information' click on 'Display and then copy and paste all the details into a response here.

We do look forward to hearing back from you so we can assist with the issue accordingly.