Did 'Apply User Permissions' break?

I dont know after which update this happened, but we noticed that the ‘Apply User Permissions’ setting for salary slips is not working anymore. Users are not able to see their own salary slips (They can see all salary slips if the ‘Apply User Permissions’ is unchecked in Role Permission Manager). I assume this problem is due to the reformatting of Employee field in Salary Slip (Employee field now contains Employee Number: Employee Name) which fails the user permission query condition. Is anyone else facing this issue? Is my understanding of the root cause of this problem correct?

No, it did not break, still works perfectly fine. After Apply User Permissions did you Apply Rule by clicking Select Document Types? If not, please do that and also check what all Roles users have and what permissions are set on it.