Personally I have observed only marginal improvements since last year, when I first got the FSD Beta software. They have come slowly and steadily, but with many steps backward. And I'm mostly driving around Bay Area suburbia, which ought to be pretty easy and familiar to Tesla's developers. There have been no "step changes", which I've found very disappointing.
No FSD step changes since last year? Really?
I don't test in Bay Area suburbia or anything similar because that type of FSD driving is already well covered. I test on a mountain road where one small mistake can lead to death. Cliffs or near cliffs on both uphill and downhill sides of the road, narrow and twisty with inconsistent corners and cambers, grades abruptly changing, lane markings that most often don't exist at all, no centerline or shoulders and almost every corner is 100% blind with no good clue as to what is coming next. Trees and rocks block vision everywhere. Because the road was built in the 1920's, the corners are dictated by the terrain and drainage needs which is why there are decreasing radius and off-camber corners, inconsistent grade changes etc. There are also no guardrails at all, the road edges are often a direct route down the mountain. In short, a nightmare for any system with pretenses of being autonomous. Humans tend to drive it either like Mario Andretti (because they know the road) or a complete beginner peeing their pants.
For the first 3 years I would typically end my testing at the beginning of the steep climb, the last 9 miles to the summit because it would fail multiple times, every time, and often in ways that were very deadly if intervention was not immediate. One of its favorite failure modes was to think the old-growth forest backdrop of a hairpin corner was a long straight-away. I suspect it was aiming for a large trunk as it would try to accelerate off the road at high speed into large trees, I can tell you, that would not end well. I would slam on the brake at the last possible moment and come to a stop at the outside shoulder of the hairpin turn.
Still, every few months I would let it have a go at the last section of road when traffic was non-existent, but it couldn't consistently and properly position itself to enter blind corners. I would stay hyper-alert for the first sign of on-coming traffic while letting it do its thing. Even letting it have its dangerous way, it could not hope to complete this section of road without multiple human interventions to avoid certain disaster. It was completely hopeless, and the most discouraging part was that it seemed to have no idea how to position itself to safely enter narrow and blind corners and it didn't help that there are no lane markings whatsoever on many of these corners. Just blacktop patches or chip seal blurring invisibly into road sand, forest duff, trees and rocks.
About 4 weeks ago, after much of the winter snow had melted, I gave it another go. I didn't have much hope other than my M3P had a new verion of FSD. To my surprise and delight, it drove the entire road without a single intervention, and, more importantly, it had learned how to set itself up to safely enter blind corners! This was a huge step change of the highest order! It was not a gradual improvement.
The entire 9 miles the car drove very much like a human, save for one 300-degree corner near the top where it briefly hesitated by slowing to 15 mph instead of driving smoothly around at 20 mph. In all other cases, the car slowed appropriately for each corner and accelerated smoothly and confidently out of each one (unless there was another sharp corner immediately in which case it just continued around, as a human would).
In the last couple of miles there was a wide pile of snow avalanche debris comprised of heavy, wet, melted snowpack completely covering the downhill lane. It was shaped like a tongue and was about 20 feet wide and 4 feet deep on the uphill edge of the road and tapering to zero exactly at the centerline, which is marked on this section of road. This would cause considerable damage to any car that drove into it at 30 mph. On the uphill leg, FSD simply drove by the avalanche debris in the downhill lane at 30 mph as if it didn't exist. On the downhill leg I was concerned because there was a blind bend in the road only a little more than 100 feet beyond the avalanche debris. If FSD exhibited uncertainty and poked along at slow speed in the on-coming lane, it would be subject to a head on collision if another motorist coming around the blind corner didn't react quickly enough.
Descending the mountain, I felt like we were approaching the wall of snow awfully quickly at 30 mph and FSD was showing no signs that it recognized the threat. I did not look at the center display because I had my full attention on "driving" and was preparing to take over because the uphill lane had no shoulder and no guardrail and any car venturing off the narrow pavement would accelerate as they bounded hundreds of feet down a 60-degree slope. Since my attention was outside the vehicle. I don't know when or if the center display pictured the avalanche debris, but the car smoothly changed into the on-coming lane and went immediately back into the downhill lane, as smoothly as the most professional driver, before gently applying the brakes (regen) and taking the corner at 25 mph. As if it were nothing at all. I could not have done it smoother or more appropriately myself! Going slower would have been more dangerous because it could have left us with nowhere to go in the event a fast-moving vehicle had rounded the blind corner at the inopportune moment.
The entire trip, up and down the mountain, positioning itself appropriately for the entrance to blind corners, slowing down and speeding up smoothly, very similar to the way a good human driver would react, avoiding the avalanche debris more safely than your average human would have done, all without intervention, I would call that a real step change in FSD. Remember, the FSD team does not work on all scenarios and driving conditions simultaneously and just because you, personally, are not driving in scenarios that have undergone massive transformation, that doesn't mean huge improvements have not been made. Just last year, FSD would try to kill me every time by accelerating off into old-growth trees or entering blind corners too wide.
The primary reason FSD is such a difficult problem is due to the huge variety of driving scenarios that must be solved for. I'm super impressed with the recent improvements on narrow twisty roads, often lacking any pavement marking whatsoever. People who think FSD is nothing more than a glorified "stay between the lines" are in for a surprising awakening!