Precision 5560 Display connectivity issue while lid closed

Here is my setup:

• Precision 5560 (i7-11850H, RTX A2000, 64GB memory) connected via TB to:
  • WD19TBS, connected to
    • SAMSUNG 32" 2560 x 1440 display via HDMI
    • DELL 24" 1920 x 1200 display via DP
    • Other peripherals you would expect via USB

The issue is the following:

• When the lid of the laptop is open, I am able to get all three screens (two mentioned above + built-in) working simultaneously just fine with each of their native resolutions.
• When I close the lid, the 24" DELL display goes dark and claims there is no signal. Windows display settings do show that there is something connected, but it cannot detect it.
• If I open up the lid again, the picture comes back on.

This is a new issue that started just this week. It has been working in this exact setup for at least six  months now. I did no changes to the configuration before this issue emerged. I did run some updates just last wk, including the BIOS, but I do not think this is when the issue emerged.

I have already done the following:

• Confirmed that latest firmware and drivers are installed both on the laptop and on the docking station
• Tried with other cables --> no effect
• Tried lowering the resolution of the larger SAMSUNG display --> no effect
• Tried switching connections so that DP is connected to SAMSUNG display and HDMI to DELL display. This way it actually does work, but this is not a good solution for me since I need to connect another computer to the larger SAMSUNG display, and that I can only do with DP.

Initially I thought this might be a display or cable issue. Neither of the displays is particularly new, and the larger one of them has been having some issues every now of them (although in this case it is the smaller DELL display that goes dark). However, since the setups seems to be working fine when the laptop lid is open. In my opinion any bandwidth issues should also be ruled out since all displays work OK when lid is open.

Is this something other people have experienced? Do you have any further suggestions for troubleshooting this issue? I would appreciate any thoughts on this. I am all out of ideas for now. The issue is not super critical, since the setup works either with lid open or with the switched cabling. None of these are optimal, but are OK as a temporary solution.