You can no longer option drag audio to extend it, or is this a bug?

Check whether the Linked Selection button is disabled—it's located next to the Snap button in the Timeline panel. If it's turned off, holding the Option key (on Mac) will actually do the opposite of what you expect: it will temporarily enable linked selection, rather than allow you to drag just the audio or video independently.

Maybe try resetting Preferences:

1. Launch Premiere Pro and hold down any modifier key, such as Command, Option, Shift (macOS), or Ctrl, Alt, or Shift (Windows). Or open it through the Preferences dialog.

2. If you've opened the Reset options dialog by holding down any modifier key, select the relevant options, press the Continue button to perform the specified actions, and resume the launch process.

   1. Depending on the keyboard modifier (or modifiers) used, the options will be pre-selected in the dialog:

      Opt or Alt: Reset app preferences

      Shift: Reset plugin loading cache

      Opt or Alt + Shift: Reset app preferences and reset plugin loading cache

      Cmd or Ctrl + 3: Disable third-party video plugins

   2. If you've opened the Reset options through Preferences, then select your relevant options from the given dialog.

   3. After selecting the OK button, a confirmation dialog will appear, displaying the specific options selected in the previous dialog.

   4. Select OK to confirm, and the next time Premiere Pro is manually restarted, the selected options in the Reset options dialog will be processed.