Unable to update macOS

At this stage considering all you've done and the problems you're having, talking to Apple seems to be in order: Mac Repair - Official Apple Support

Follow the previous advise and have the computer evaluated by Apple or Apple Authorized Service Centre.

Have them do an Over Nite Test with their Special Hardware / Software and make specific to mention to check the RAM Modules for possible Module Failure.

Have seen another couple of people with this exact same issue and presto - RAM Module failed the Stress Test.

Any After Market Drive in the machine.

There are reports appearing on the ASC Forums regarding failed installation of Monterey on older Qualifying Apple Computers. In most cases this is related to having a NON Apple Original Internal Drive ?  

The same would apply if the user is attempting to instal Monterey to an External Drive

The EFI Boot ROM included in Monterey is verifying for Original Apple Drive and if not found , may Balk or fail to upgrade to Monterey. 

Reports indicate the EFI BOOT ROM is Required to Flash the Computer and is a  requirement for a Successful Monterey Installation.

Then refer to earlier post regarding Over Night Hardware Test conducted by appropriate qualified Service Centre or Apple themselves.

Ouch, but at least the source of the issue has been identified and solution.