Without attention it is something that can continue to impact what you are able to do.
As you noted there has been some damage to the tendon.
If the cause of IT Band inflammation isn’t identified the situation will not improve.
You are passed your body’s tolerance level for “generally was squat was pretty good.”
A valgus knee episodes:
Pro Episode #5 – Knee Stability and Laxity
Episode 240: 10 min Squat Test #8, Athletic ACL Injury Prevention
Episode 07: Bro, Your Navicular Bone Dropped
Have someone video tape you running so you can see exactly what you are doing vs what you think you are doing. Are you doing any drill/skill work with running?
What did the ortho surgeon say?