I found the workaround; 1) sing-in: standard double click doesn't work properly, instead I touched the number with one finger, while still holding (don't release the finger), randomly tapped somewhere on the screen with another finger. With this method, I could enter the passcode and sign-in. 2) Disable VoiceOver: again if you want to do manually, I think tapping method described above may work to navigate in settings (not tested); what I did was to simply ask Siri to disable it.
For Apple Developers, based on my experience, remaining issues with VoiceOver iOS26 if these are not intended features:
1) Double click function (work-around: do first tap but don't release your finger, do random tap anywhere on screen with second finger)
2) When you tap side button, VoiceOver starts reading UI elements but repeats some of them 2-3 times
3) When you enter 6 digit passcode, if the last digit is one of the button with letters 2(ABC) --> 9(WXYZ), VoiceOver reads number and plus letters , ex: " 9 W X Y Z"