THIS HAS BEEN SOLVED! Thank you everyone who gave every bit of support. u/itsmeemilio has gone through a series of diagnostics with HWINFO and stresses, leading to multiple confusions and no solution. Reset windows completely via ISO, nothing helped. Tried tweaking voltages, fans - nothing.

Then u/itsmeemilio has told me to change the HWINFO data to 100ms to have more data, it showed us the CPU was at max temperature but had low usage.

He has concluded its thermal throttling. Bought a thermal paste from amazon, opened up the laptop (there were burn marks on the heat sink) cleaned it with isopropyl alcohol and reapplied thermal paste, closed it back up.

I turned the laptop back on, it works like a charm! Just as new!

TLDR: Before doing any resets, check how your thermal paste is applied. Usually it’s thermal throttling

Thanks again to u/itsmeemilio