I am looking for help with OTA firmware updates.

Regardless of the "port" selection, the upload operation attempts to use the USB. (via dfu_util)

When I use the arduino IDE (version 2.3.4) the OTA upload completes normally

Output from failed upload in VS2022/VM
Uploading 'RGB_Light_nov27a' to 'Arduino Nano ESP32 (nano_nora)' using '192.168.50.56'
Uploader started for board Arduino Nano ESP32 (nano_nora)
Upload method will be: bootloader
Uploading via Bootloader 
-arduino5\dfu-util --device 0x2341:0x0070 -D e/RGB_Light_nov27a.ino.bin" -Q
dfu-util 0.11-arduino4
Copyright 2005-2009 Weston Schmidt, Harald Welte and OpenMoko Inc.
Copyright 2010-2021 Tormod Volden and Stefan Schmidt
This program is Free Software and has ABSOLUTELY NO WARRANTY
Please report bugs to http://sourceforge.net/p/dfu-util/tickets/
dfu-util 0.11-arduino4
Copyright 2005-2009 Weston Schmidt, Harald Welte and OpenMoko Inc.
Copyright 2010-2021 Tormod Volden and Stefan Schmidt
This program is Free Software and has ABSOLUTELY NO WARRANTY
Please report bugs to http://sourceforge.net/p/dfu-util/tickets/

The uploader returned an error
No DFU capable USB device available


Output from successful upload via IDE
Sketch uses 974089 bytes (30%) of program storage space. Maximum is 3145728 bytes.
Global variables use 63080 bytes (19%) of dynamic memory, leaving 264600 bytes for local variables. Maximum is 327680 bytes.
8-arduino.5\tools\espota.exe" -r -i 192.168.50.56 -p 3232 --auth={...snip...}  -f 78/RGB_Light_nov27a.ino.bin"
Sending invitation to 192.168.50.56 

Uploading: [                                                            ] 0% 
Uploading: [                                                            ] 0% 

Please install the latest release (2024.1211.0) from the top of the below board, this should resolve the issue with the OTA patterns not being applied correctly (the above override should not be needed in this release):
https://www.visualmicro.com/forums/YaBB.pl?board=VS_ARDUINO_EXT_RELEASES