For me, on Xbox Series S, frame rate drops also happen when reaching the end of a track and turning around 180 degrees. Sometimes it's so bad it makes it hard to control the car, especially when driving very fast cars which require a lot of quick input. When this happens, if I look behind the car by using the right stick, what's happening in the track behind me has no frame rate drops. So it seems that when the track has to be suddenly rendered ahead of the car, the game doesn't handle it well.
I've also noticed that lens flare effects seem to trigger this, or maybe it's a coincidence. It would be nice to just turn those off anyway since they shouldn't need to be active if I've chosen the car hood camera or chase view.
Weather effects, fireworks and such aren't the only things that trigger this problem. This can happen on tracks with less detail. I've found the best way to avoid this is to make custom races on tracks with fewer spectators, less trees, and also of course during the day and not raining.
I noticed these performance issues when I got the update too. Before the update I had sometimes noticed minor issues with dynamic resolution, but rarely did I notice frame rate drops, and they weren't this bad.