I don't know if this will apply for everyone, but I also had this problem and tried all the sfc, dism, and add-appxpackage registration fixes to no avail.

I posted this answer here originally ' Windows 10 20H2 Snip & Sketch problem - Microsoft Community' For me it turned out to be a Group Policy causing the problem. I also had this problem after updating to 20H2 for both an in place upgrade from 1909 and a fresh install of 20H2. The selection stays up and won't save, keeping my laptop locked in screenshot mode indefinitely until I alt+f4 out.

*sigh* I used the freeform selection for this one. As it is now, I had to take a photo with my phone to show what I mean, since I can't take a screenshot to show my screenshot problem. I am a moderator and help desk member of a Discord channel for a Minecraft Rendering Tool called Chunky, so being able to take screenshots to guide and direct people to solutions to their problems is ESSENTIAL. The only way for me to get out of it is to alt+f4, and when I do, the screen cap goes away and shows me my other open programs and the task manager that were stuck beneath it. I try to call up the task manager with ctrl+alt+delete, and the blue screen pops up with the options to Lock, restart, log out or task Manager, but when I click on task manager it just brings me to the screen cap. I can't back out of the screen cap, I can't alt+tab to go to another program, the windows button doesn't work. It just stays up on screen forever and makes the display non interactive. I was taking screen caps fine all day yesterday, then I boot up this morning and try to take a screen cap and.the selection won't go away. This just happened to me as well this morning.

Install snip and sketch windows 10