Microsoft 365 features that help users manage their subscriptions, account settings, and billing information.
Hello,
If you purchased an email from GoDaddy, it is a custom domain email address, right?
GoDaddy is basically a reseller of Microsoft commercial products. Even if you leave them and set it up with Microsoft directly, your email address is still a commercial account; Microsoft calls it a work/school account.
Because Microsoft's consumer and commercial products are from two separate ecosystems. It is not best practice to use a commercial email address for consumer subscriptions/products like Microsoft or Office 365 personal/family. So, the real issue is not because of GoDaddy, but you just simply cannot use a commercial email address for your Microsoft 365 personal.
To make sure your Microsoft 365 personal works properly, you should give it a proper alias. Can you sign into your personal account via this link: https://account.live.com?
If so, go to Your Info > Sign in preference, Add an alias.
You have two options here:
Create new: this will allow you to use the native domain outlook.com to create a new alias.
Add existing: this will allow you to add a 3rd party email address, such as yahoo, gmail, as long as they are not already associated with another Microsoft account.
Once added, make this new alias your primary alias, then you can delete the other email as alias, and that email is free from this Microsoft account instantly.