Issues with built-in apps in Sequoia 15.5 (Migration Assistant, iCloud, Password Manager)

It does not sound like the Mac was properly reset before being sold to you or reset by you to set it up as a new device.

What to do before you sell, give away, trade in, or recycle your Mac - Apple Support

iCloud requesting access to a Mac which is not one of yours is concerning. That means that there is encrypted data in iCloud for that account from that Mac it is asking for and it will not sync to the current Mac until that has been authenticated. Are you using an Apple Account that was created by you, or was there already one signed into the Mac?

Ok, that looks like the Mac is wanting to sync encrypted content that was created with your Apple Account signed into another Mac. That Mac may no longer be in your Device list, but the data that synced to iCloud is still stored in iCloud. Passwords are end to end encrypted, so those stored in iCloud from your Apple Account will not sync back to your new Mac until you have provided the Login Password for that Mac.

On your Mac, go to  > System Settings > [name on top], and click See All. Does it show Passwords & Keychain as being turned on? If not, that explains why you are unable to sync new Passwords when you tap on it, you should see the option to turn it on. If you are unable to provide the Login Password to continue and sync the content, then you should see an option to delete the encrypted data in iCloud, so you new passwords will be synced. If that option is not given right away to delete the encrypted data, then make a guess and the option may appear after it has failed.

Could you post the screenshot of the request you are seeing, that may be helpful to determine the reason why it is asking for it. Please redact any personal information including the serial number of the device being requested.

Thank you for your response, Jim. I believe, I did the usual routine. When I first started my MacBook it went through initial installation where my Apple ID was requested, etc. To be frank, I have done this procedure twice in my life so I would not be able to tell if something was off. Everything seemed to be working just fine until the migration process, it seems like there is still something in cache which is trying to sync the other Mac.

I had only 1 device under my ID - and yes, I created it myself. Then I added friend's MacBook for a while and once I got new MacBook, I removed friend's MacBook from my ID, so currently I am at 2 devices - my old Mac and new MacBook. I have a feeling that my friend's MacBook is requesting the access but cannot confirm it since it got stolen. But definitely not the serial number of my Mac.

I tried clearing cache, keychain, switching off and on the toggle for iCloud sync. Everything seemed to be working for a day or two and then again, like today, I am getting another request to approve the access for the same Mac.

Thank you for your help, it is much appreciated.

I must have a different version because when I go to System Settings and click the Apple Account in the top left corner I do not get the option to See All. However, knowing this from the many instructions I have been through, first I need to go to iCloud and there I can see Passwords (Keychains were shown in the older OS version, now it's just passwords). Yes, the toggle switch is on - I tried both switching it off and restarting and switching it on and restarting. Nothing helped. I have removed everything from iCloud, I have cleaned up all the Cache folders in the Library that were related to iCloud and Password and Keychains.