Welcome to the Microsoft Q&A forum.
I understand how stressful this situation can be, especially when the account was compromised and the usual recovery options no longer work. Based on the scenario you described, this behavior is expected when two-step verification is enabled and the security information has been changed.
When two-step verification (2FA) is turned on and the attacker has changed the security info such as the authenticator app, the automated account recovery form (ACSR) is no longer sufficient to verify ownership. In this situation, the form may consistently be rejected even if the information is correct. This is due to stricter security enforcement to prevent further unauthorized access.
Please note that contributors on this forum do not have access to Microsoft account systems and cannot override security decisions or recover accounts directly. Therefore, contacting Microsoft Support via live chat is the appropriate next step for further guidance. Please follow these steps carefully:
1, Visit the Microsoft Support contact page: Contact - Microsoft Support
2, In the search bar provided on the page, type "Account recovery" and press Enter.
3, Click on the "Get Help" button that appears.
4, Scroll down the page until you see and click on the "Contact Support" option.
5, When prompted to select your product or service, choose "Other Products".
6, For the category, choose "Manage account security".
7, Look for and click on "Chat with a support agent in your web browser".
8, Confirm your personal email when prompted - this is the email Microsoft will use to communicate with you during and after the support session.
9, When connected, clearly explain your situation. Be concise but include all relevant details.
I hope this clarifies the situation and helps you move forward.