Device added to Apple ID, and showing on Cloud Drive BUT not available on Device

I just added a new iMac to the my Apple ID. It went through the 2 factor authentification and now I can see the iMac on my phone, on my browser window opened to my icloud etc. HOWEVER, the device (iMac) itself is NOT behaving like its signed in to my Apple ID. So it just goes back to the "sign-in" - username interface and the side bar just shows and un-signed into "iCloud Drive".

Why is this happening? I have done all the usual things: restarted device, removed and added device from Apple ID again etc.