<<Resurfacing the information from comments for broader community usage >>
@GerhardK Apologies for delay in getting back to the thread.
Checking in to see, as part of the initial setup Azure Arc enabled server was connected to Log Analytics via agent or using the VM extensions ?
If its via the agent, have you tried looking into MMA agent on the VM and see if you can remove the existing LA workspace and add a new one.
Please see if above information is helping in your scenario, if not this might need a deeper troubleshooting for your environment. Looking forward to hear from you.