Hi Mahid Khan,
Since you can sign in but PIN setup does not continue after verifying the password, I suggest resetting the existing Windows Hello PIN data:
- Open File Explorer and go to
C:\Windows\ServiceProfiles\LocalService\AppData\Local\Microsoft - Take ownership of the Ngc folder if Windows denies access.
- Rename
NgctoNgc.old. - Restart the PC.
- Go to Settings > Accounts > Sign-in options > Windows Hello PIN and try setting up the PIN again.
Before making this change, please make sure you know your Windows account password and have your BitLocker recovery key available, especially given the recent hardware repair.
If PIN setup still does nothing afterward, let us know whether you're using a Microsoft account or local account, and whether any error message appears.