I am afraid you’ve been hit by Plasma/KDE/Arch
SDDM was recently resurrected (development was stuck, no new versions released for a long time) and it seems these actors’ decision to apply/merge a huge amount of commits in one update was dangerous.
Too many critical changes in the way a DM works, especially environment variable handling.
I haven’t yet checked each of them, but by my KDE and bash experience, I expect a storm of problems. Some are already reported upstream.
Edit:
After login from xinit, you can test your sddm themes and look for errors:
You can test your themes using
sddm-greeter
. Note that in this mode, actions like shutdown, suspend or login will have no effect.
sddm-greeter --test --theme /path/to/your/theme