Local folder share problem on new pc with 22621.2283 - Wrong username or password?

Got a new pc and installed 22621.2283. Now ive got local lan and folder access problem.
Have several win 11 on local net and wifi on set to private for sharing.

On the new one, the folders are discoverable but get the error of wrong username or password when connecting. Its the same windows account on all machines.
Only way of getting it to work is turning off the option " For improved security, only allow Windows Hello sign-in for Microsoft accounts on this device"

any clue what is going on?

I believe this would be normal when you have "only allow Windows Hello sign-in for Microsoft accounts on this device" set to ON. (The word ONLY is important here)
In this case, there is no way to enter a PIN because a PIN is not used for password-protected sharing, only a password. A PIN is not to go off of the local PC.

I thought so to, but on another machine I can access its shared folders and that one is set to always hello..

But if I turn off password protected sharing it works, so something strange going on on this setup.

I believe when you uncheck "only sign in with Hello" you are not removing the pin if you have one set up. It's still there in TPM. Rather, on the the signin screen, you are given all the available login options to get into the machine. I may be incorrect about this as I do not use Hello at all and never set up a pin.
I took this screenshot off the web, so it might not appear exactly like this any more but it should look something like it. You would have to compare how the login screen appears when it's off and on.