My base and villager 'pen' are surrounded by sweet berry bushes for damaging/killing mobs, which before this update would indeed damage mobs until they died.

Playing today with the new update 1.17.34, the mobs took no damage. I walked my character into the sweet berry bush and 'I' did take damage so this appears to only affect mobs.

 Additional notes: I was playing on a realm, survival = easy, experimental features on.