I noticed something that may help others as well.
Yesterday once the issue has been resolved and the new package released, I performed the Update of the Application Control & URL Filtering via SmartConsole. This resolved the issue on 2 out of 3 clusters. The 3rd cluster, although it had the same updated package version(110424_1) as the other gateways, was still dropping traffic.
So I performed the steps mentioned in https://support.checkpoint.com/results/sk/sk182202 and suddenly it worked. The package version was still the same but apparently there was a difference between updating via Mgmt and manually deleting the files.
Hope this helps anyone else