You should never let a user know that a password they're suggesting is already in use in the database.
This is a great example of why you should never "roll your own" with authentication code. And you should no longer be storing passwords in the DB, hashed or not.
Instead, use an external service like Microsoft Entra ID, Google, etc. to do the authentication phase. Doing it yourself nowadays is a mistake.
It's easy to use options like Microsoft's B2C in your app, particularly in ASP.NET Core, and drastically more secure.