Having the same issue after upgrading my PC. Pin setting is just stuck. I had to re-activate my Windows copy to connect it to the new HW and it's stated as "Activated" in the settings. At the same time I can't set PIN due being stuck in the same loop as OP. I can't change to the local account either as system says that it can't verify me.
I don't know how to resolve this rather annoying issue and I would really appreciate if someone from Microsoft could assist me with this.