Having the same problem on new Mac mini

After a week of struggling I was able to fix this. I couldn't upgrade to macOS Sequoia because of the same problem(I think it is the same problem but different errors). I was getting a personalize software error and couldn't upgrade by any option(tried different variants). So I turned Find My Mac off. Then upgraded to Sequoia(I think you can skip this if you don't want to upgrade). And after that I was able to reduce the security policy. Hope that will work for you too.

I think it's a weird problem, because I bought two exact Mac minis and only one of them had this issue with upgrade and security policy.