jrinman90 wrote:
Yes, I first attempted to transfer from my old Mac, but ran into the OS incompatability issue so then attempted "Set up with iPhone or iPad". The "Quickly Set Up Mac" page appears, I open my phone and position the pattern, the Accessibility screen pops up and I click "Not Now", then that password screen appears.
https://discussions.apple.com/content/attachment/854b9b8e-f471-476f-a325-3c38c002faae
https://discussions.apple.com/content/attachment/019f22c6-74e7-4c58-b301-47b5224086ea
https://discussions.apple.com/content/attachment/38e9f065-0b54-47ea-ba2e-42c9ace0bb75
I didn't realize this was an option. Combined with this new information & the picture in your original post, I think the setup was interrupted in some fashion since the first picture in the original post is trying to access the "System Keychain" with the username & password which is not created until the next step shown in that post.
You will likely need to start over at this point, but try clicking the "Back" button until you get back to using the FaceID to authenticate with your iPhone & pair it with your new Mac. You may need to go back as far as Step #3 or maybe Step#2. See the Apple instructions for using "Setup with an iPhone or iPad" in the following Apple article:
Set up Mac with iPhone or iPad - Apple Support
Make sure your iPhone remains unlocked during the setup process since it may interrupt or abort the transfer.
Since this is a new feature for setting up a new Mac, it is very likely there are bugs and it is not thoroughly tested by Apple. Even the other setup options shown will sometimes cause people trouble and they've been available for decades.
If you still have issues, then I would suggest selecting "Setup as new" on Step#1. It is best to avoid signing into your AppleID or iCloud during setup since there has been a known bug with not being able to agree to the Terms & Conditions during setup if you are signed into an AppleID/iCloud. You can easily log into your AppleID/iCloud after finishing the initial setup. Just launch System Settings and select the "Apple Account" option (usually the first item listed in System Settings).
Manage your Apple Account settings on Mac - Apple Support
