Your experience is exactly the same as mine and you are so spot on on every aspect. My iCloud account and service was fine for the last 10 years... until November 2020.
This thread now has 600 "I have this question too", and I'm sure the amount of people affected is in the thousands. The thread was viewed by 13,766 people.
I was on the phone for almost an hour too and pretty much begged for the support advisor to help escalate this to senior iCloud engineers and restore normal service once and for all.
But like you, I believe Apple is fully aware of this issue and may even have created it in order to push obsolescence on older devices. Some of my devices are indeed older as well, but some aren't. And I get locked out on all of them...
It is really sad that, since November 2020, we have to live with the constant fear of Apple mishandling our sensitive personal data and deteriorating the iCloud service and our enjoyment of the Apple devices we purchased.