Why is my password accepted for login but not for updates?

I have decided my Mac M1 mini is virtually bricked out to me, or anybody else, as its software won't fully accept my identity, and won't let me reset it.

I can login with my original, or other admin users created by me. Do stuff. Sync my AppleID data. Install and use applications. However after downloading Sequoia update manually from AppleStore, and starting this App, the second login prompt just goes away leaving me back at the continue screen, without explanation. The same thing happens with trying to upgrade from system settings. I have tried the recovery options startup, and the resetpassword command from the terminal.

The resetpassword manager, I am asked to chose an admin user. Yes it accepts my password, then asks to pick another user to reset the password for. But I when I try to do that, I get the error message "Invalid credentials". I can change passwords or set passwords for a new user from my ordinary login.

But I discovered that the erase manager doesn't work either, with the same sort of problem. After putting in my AppleID password, a mysterious error message comes up in red text, DKError 400.

Despite the chronic user id situation, I was able to upgrade to Sonoma 14.7.2 through the Recovery options boot. but thats it. Sonoma is not available as a "tag", indicating no maintenance or attention to detail of this site.

So now I am in contempt of this Apple disk, and have never been in receipt of any kind of Apple support. I must have broken some secret setup step that I am not aware of, that Apple won't say anything about, to mere mortal users, and I cannot do anything further with this M1 16GB ram 256 gb disk. I'd like to sell it for some food money, but no one would accept such a hopelessly locked out conundrum. I've cancelled my Parallels subscription, and there is nothing further I want this awkward device for.

Fortunately I've a ThinkPad laptop running Linux (Windows sucks too).

I've tried the forgotten all passwords step in the "Recovery", and it gets to asking for the Mac Mini "unlock password", and I have no idea what the **** that it is supposed to be. It had pictures of the Mac Mini disk multiple times. I have dumped all my other Apple devices, and it looks like I will have to do the same here.

[Edited by Moderator]