Seems ESPhome 2023.2.4 have broken the template cover component:
I have created an issue #4313 at github, but is wondering if anyone else is seeing this problem.
I have used the template cover as my garage door for a few years. After updating ESPhome from 2022.12.8 to 2023.2.4, and allowed ESPhome 2023.2.4 to update the code in the garage door esp8266 d1-mini, Home Assistant (core 2023.2.5) no longer sees the cover state change. Log showed the ultrasonic sensor still measured the distance correctly. Replaced the ultrasonic sensor with a new one did not fix the problem.
Using a backup, restore ESPhome to 2022.12.8, then regenerate code for the d1-mini using ESPhome 2022.12.8, Home Assistant is then able to see the cover state change again and everything works again.
Now, for my own solution, I have update ESPhome 2023.2.4 again, but leave the d1-mini code at the 2022.12.8 version.