It seems that the behavior of how macOS Monterey handles spacing between items in the menubar has changed.
The result is that sometimes, when the time/date changes, it can cause the spacing between multiple clocks (if you have more than one enabled) to become too compressed or tight.
Clicking on any of the world clocks in the menubar currently forces an update that fixes the spacing issue. But it would be nice if the compressed spacing could be avoided in the first place.
I will update this issue with screenshots showing the issue the next time I'm able to capture it.