A bit of an update (and workaround).
/var/lib/flatpak/repo/config to add
http2=false fixes using Flatpak (thus Discover), so it is an issue with how ostree interacts with curl, similar issue https://bugzilla.redhat.com/show_bug.cgi?id=1697566
Installing curl 7.82.0, or building latest ostree on that curl made no difference,so I doubt this is a KaOS only issue.
Reverting one upstream commit fixes Ostree:
Rebuild ostree is up in the build repo, please test:
sudo pacman -U http://kaosx.tk/repo/build/ostree-2022.3-3-x86_64.pkg.tar.zst