I fixed it in a different way... This one is interesting. I was really ****** about this issue. However, my resolve was way simpler. I followed the instructions here and it still didn't work. I noticed that something weird happens with the username. When you create an account, for example John Doe (the account creation prompts for a full name), the username/password prompt after upgrading to BigSur will auto-populate the username for you based on whose logged in. It will populate the user John Doe just like that in the username field. When you just change the username from John Doe to johndoe (no spaces) the password works. I am ashamed to even say how much time I spent on this issue before doing exactly this. This worked for me. Maybe it's a one off fix for me, but still an underlying issue. Hope this helps someone.