Why is my Mac Studio rejecting the correct password while updating the software?

<< but safe mode boot option does not seem to be available for me either. >>

then your Mac has a serious problem, and may need service.

if you are the First or Only user of your Mac your Admin password is required. That is the password for the login account you created when you first set up your Mac.

You need an Apple-ID account in good standing (soon the be transitioned to "Apple Account") but that is NOT the password you use to make administrative changes such as install software updates.

For what it's worth, I have been able to use the same password to do all OTHER administrative things on this Mac (I have a Studio M1 Ultra), and all prior updates, just not the one this week. Something new is wrong. It might be a bad update, but it's not user error.

Yes. The admin user password - the password to login to the device with, not the icloud (AppleID) password. ALSO, support tech suggested trying the update from safe mode, but safe mode boot option does not seem to be available for me either. Trying to update Sonoma 14.5 to 14.6.1. Have never had any problems with this before.

You are correct, it had such a serious problem that I had to erase and reinstall the OS, then recover from time machine and use migration assistant to get back to where I could operate again. Fair warning to anyone else with this issue: BACK IT ALL UP before you call support. Not all of the technicians are qualified to help you with problems of this nature. By the time I got up to a Level 4 tech, it was already game over.

What password are you entering? Have you entered your Mac user login password (the password you use when logging into the Mac).