Adding second account to Edge, PIN is not recognized

Question

I have a secondary account. I have created a Windows 11 VM on which it is the only account. The PIN works fine in that case.

Next, I try to add this account to Edge on my laptop, which I log on to with this, my primary account...

1. "Set up new personal profile"
2. New window opens, "Choose an account", select secondary account, which it memorized the first time I typed it in
3. "Sign in to sync data" button [1]
4. Popup dialog - "Use Windows Hello with your account" [2]
5. Press OK button
6. Popup dialog - "Sign in" (If I have not done so recently), authorize the secondary account using Microsoft Authenticator for my primary account. [3]
7. Popup dialog - "Making sure it's you"
   "We need to verify your identity for [secondary account]"
   [PIN prompt]
8. Cut and paste PIN from my password manager, just as I do to log in to the VM, hit return
9. "The PIN is incorrect. Try again."
10. Trying again also fails

Any idea why I can't add this account?

[1] - I have also tried "Start without your data". The path is longer but the results are the same.

[2] - Windows Hello is disabled on this machine.

[3] - I am confused by this step, as it does not seem to actually authorize anything.