I was wondering if I'm missing a setting here, I was trying to create a hole in a path, but when the top object is completely inside the bottom one, it disappears, I haven't noticed this differing behavior with the intersection operation for example.
The normal path operation works as I expect it too.

I added a video of it to explain what I mean

I can't reproduce this abnormality (LPE boolean operations, set to difference with circle used as Operand path : when circle is entirely within rectangle, difference does not work) with Inkscape 1.2.2 (732a01da63, 2022-12-09) - I used your measurements (rectangle W=H=212 px / circle Rx=Ry=71 px).

See screenshot : the two top shapes have LPE set to difference, the bottom one intersection.

I´m able to recreate this issue with Inkscape 1.3-alpha (95f74fb, 2023-03-31):

Ah thanks for checking, I'm running the latest version as packaged on Flathub: Inkscape 1.2.2 (b0a8486541, 2022-12-01)

So mine isn't alpha but still has it, should I open a bug report?

Yes - please.

Ok, done! https://gitlab.com/inkscape/inbox/-/issues/8618