Workaround/Fix: Verification failed - This action could not be completed. Please try again.

Symptom:

After restoring iPad to factory defaults, attempting login to AppleID during setup fails with "This action could not be completed". Attempting to create a new AppleID instead results in "Verification failed - There was a problem connecting to the server".

Cause:

Seems to occur if restoration/recovery process involves the use of anything other than iPadOS. This is problematic as Find My iPad requires a AppleID login which, if your iPad refuses to connect to your AppleID will fail, thus forcing iMac/PC-assisted restoration/recovery, which in turn seems to cause AppleID login issues.

Workaround:

Before I start, I should state that this has worked for me not just once, but twice.

Restore iPad to factory state via iPad Settings > General > Erase All Content and Settings.

If this is not possible because Find My iPad requires login (which fails), then you will need to connect your iPad to your iMac/PC, place the iPad into recovery mode and restore it to factory defaults. Do not attempt to restore any backups at this point, but set up as a new iPad. Once your iMac has restored your iPad to factory default state, you may still have trouble logging in to activate your iPad, still receiving "This action could not be completed" error. If so, disconnect your iPad from you iMac, then on your iPad, skip activation, setup etc until you see your iPad's factory default home screen and then select Settings > General > Erase All Content and Settings (i.e. restore again this time from iPadOS only). As you're not logged in you wont' be prompted for your AppleID.

Once your iPad is in factory default state, and crucially has no residual data from the iMac, you should be able to set up your WiFi connection and successfully login to your AppleID. When prompted to restore a backup, make sure you choose one from iCloud, as selecting one from your iMac will likely cause AppleID login problems again (meaning you'll have to start over).

Speculating

AppleID refuses login to any iPad that has been restored using Apple's iMac/PC assisted restoration procedure. It's almost as if the official Apple tethered recovery/restoration process is being treated as a jail break. I'm not sure when the issue started, but probably within that last 6 months. Not sure how common the issue is, but it's very odd. It may also relate to the age of the iPadOS device (stuck on iPadOS 16.7.11)

Anyway, I hope the workaround works for you. Hopefully, Apple will figure out why this issue occurs and will fix it in due course.