Cannot install apps from AppStore

I just spun up a Virtual Machine with macOS 26 and when I try to install Xcode

1. the system does not recognise my iCloud password (bad!)
2. it keeps on rejecting my logins (good! - see img 1)
3. it does not even allow me to reset password (bad! - see img 2); even worse, if I try, the app enters an inconsistent state in which I cannot even quit (must `kill -9` it)

The funny thing is that if I run the same thing on the hosting machine, it works fine - the only difference being that the hosting machine which runs macOS 26 as well, has been upgraded from a previous OS version, whereas the virtualised one has been directly spun with Tahoe.

Thanks in advance for your help

img 1

img 2

[Edited by Moderator]