Chosen Solution

Customer got just a little liquid on M1 while it was in a back pack. Opened it up and found just a couple of liquid spots (not on logic board). Machine boots up but will not take password. However it will take password in Recovery Mode. This has me stumped UPDATE Ran Disk Utilities Repair & re-installed Monterey. It now takes password, looks like it is rebuilding system, will know result in about 20 minutes.

Well. it’s working now. Don’t know why it wouldn’t take the login password, but I’m going to leave this Q & A up as it might help someone else.

Posting for reference, but I HAVE seen non managed M1’s disable the account if you get it wrong or it has ghost type. You need to wait or reset it using the resetpassword method when this happens in my experience. If that doesn’t work, you need to reinstall the OS. I suspect the M2 series will be the same.