Apparently, the problem is related to a corrupted Windows profile account. I've seen this happen before, and it's probably what happened to my profile because it showed the same behavior as yours.
While there are ways to try to repair it, they are complex, unreliable, and rarely provide a complete solution. Therefore, the most effective and practical alternative is to start using the new Windows profile account as your primary account and migrate your data from the old one. Then, you can switch it to the Microsoft account you want.
I know it's not what you were looking for, but it's the safest option for your case.
You can transfer all files from the old profile account folder to the new profile account folder. Profile account folders are located in "C:\Users". There's no need to copy the "AppData" folder, as it often contains what caused the issue.
Once you're satisfied, you can remove the old profile account by following the instructions under "Remove a user account" in the article I shared earlier.
No problem if you prefer to keep the old profile until you're sure you've transferred everything.
Feel free to ask back any questions.