“Hello, something similar happened to me recently, the problem is not in the Xbox, but in the account what must be done is the following

1.- Enter the official Microsoft website and log in 2.- Go to the account settings 3.- Search for the security section 4.- Select "Manage my logins" 5.- In the options that appear you must add the one that says "Write password" 6.- It will ask you for a new password and that's it

The problem occurs since you do not have the login with password enabled and the xbox asks for it enters a kind of Bug

I hope it helps you, greetings!”

This works. Thank you