Submitted by Rhaydden
https://github.com/initia-labs/initia//blob/f5cd97d3aadd694d511c61ce5f55a772f4d2b904/x/ibc-hooks/ibc_middleware.go#L61
The OnChanOpenInit function in ibc_middleware.go incorrectly returns the original version parameter instead of the negotiated finalVersion returned by the underlying app.
The middleware ignores any version modifications made by the underlying application during channel initialization leading to version mismatches between channel endpoints. This renders OnChanOpenInitOverrideHooks completely ineffective for version negotiation. 
Also, it provides incorrect version information to OnChanOpenInitAfterHooks.
As a result, the version negotiation chain that hooks are designed to participate in broken.
beer-1 (Initia) confirmed and commented:
Initia mitigated:
Status: Mitigation confirmed. Full details in reports from 0xAlix2, berndartmueller and Franfran.
For this audit, 7 reports were submitted by wardens detailing low risk and non-critical issues. The report highlighted below by Rhaydden received the top score from the judge.
The following wardens also submitted reports: ABAIKUNANBAEV, Franfran, gh8eo, gxh191, oakcobalt, and Sparrow.
Note: C4 excluded the invalid entries determined by the judge from this report.
