You didn't tell us what performance meter you're using, I have no idea if you're reading it correctly either. I can tell you my 3070ti has zero problems running at 99% throughout all of Valheim - instance & fire laden or not. Of course I am asking it to try for 4k@60p with max graphics.

My only guess - and it's a pretty wild guess - is that you're using windows without the fancy governor for an Intel CPU with efficiency cores (does win10 have that yet?), and your games particle physics have ended up on a core that can't handle them - bottlenecking your GPU and lagging the game.

I bought a 12th gen without efficiency cores (i5-12500), I also have half your ram - zero problems.