Thank you for the detailed description of the problem, it helps me a lot. I'm not sure what exactly the problem is, but your configuration appears to be correct to me.
Can you please check the log-in credentials? I was trying to log in, but it does not let me access the back-end nor the front-end of the website.
There is one thing you should probably try:
– On the Frontend Search Settings -> Advanced panel, try changing the Category/Taxonomy terms logic option to At least one of the selected terms should match value: https://i.imgur.com/zX1xxmy.png
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