- Ensured objects are transformed prior to storage in `SharedInformers` if a transformer is provided and `WatchList` is activated. ([#131799](https://github.com/kubernetes/kubernetes/pull/131799), [@valerian-roche](https://github.com/valerian-roche))

  * Add an AEAD encrypting transformer for storing secrets encrypted at rest ([#41939](https://github.com/kubernetes/kubernetes/pull/41939), [@smarterclayton](https://github.com/smarterclayton))

- List operations against the API now return internal server errors instead of partially complete lists when a value cannot be transformed from storage. The updated behavior is consistent with all other operations that require transforming data from storage such as watch and get. ([#69399](https://github.com/kubernetes/kubernetes/pull/69399), [@mikedanese](https://github.com/mikedanese))...

### Feature

- Parallelize calls to conversion webhooks when watching from etcd to prevent watchcache from lagging and helps clusters with slow conversion webhooks or transformers.