In this case your assumption is account's registries are corrupted.
I followed your instructions but till now I was not able to download an application (still working), too long for me and I'm not positive but I'll wait to see eventual message. For sure behavior is different, with old account error is almost immediate and same message "something...." but if only registries are involved (otherwise copying fron old to new would mean to bring the old problem to the new problem :-)
One thing triggered my attention: I installed for example wsl or kali NOT using the store but I see them as apps of the store: does this mean I'm not receiving any updates about them due to my problem with the store?
If this would be the case, if the second option you suggested should not work I think I will proceed with first option, reinstall keeping files & application.
But, I also get the doubt of something wrong on the backend side. I use same account on a desktop at home, now I cannot check as I'll be back home in a week, that will be the first thing I'll do once home.
In synthesis, problem could be gone, let's wait till message will appear. I'll check store on desktop with same account (or ... at least same account in the cloud). That could be a great hint
Yes, I believe there is some level of corruption. A repair install can hopefully address that.
Another option is to unlink your current user profile with your Microsoft account, go to Settings > Accounts > Your info, click on "sign in as local user instead". Then restart the computer, sign in. Then do the following:
Hold down Windows + R keys, type in netplwiz and press enter. Then click on Add to add your Microsoft account as a separate user. Then make it admin.
Restart the computer, and sign into the new user. See if it works.
If it works, you can migrate your data from old user profile to new user profile.
Go to C:\users\old user folder. Copy your personal files from there to C:\users\new user folder.