Cannot add category or custom taxonomy from admin. WordPress site is hosted in Windows 16 server via IIS. No XAMPP or WAMP

Question

I am facing a strange issue and have no clue whatsoever.

My WordPress site is running a custom theme and hosted on a Windows PC via IIS (no XAMPP or WAMP). I can save Post, Custom Post Type, also can create new User and edit those as usual.

But I simply cannot add any Post Category or Custom Taxonomy associated with the custom post type. The wheel beside Add New Category is spinning and nothing happens from here. And in the end, nothing gets added!

To test, I switched back to twentytwenty theme but the same thing is happening here as well.

I checked the database prefix. The table prefix is yd20_, the correct prefix is defined in wp-config.php ($table_prefix) and it has been added to $GLOBALS array correctly in wp-settings.php file.

However, one question! The prefix in the database is yd20, while $table_prefix in wp-config.pg is Yd20 (Y is capital). I changed it to small (y), but got an error in the site. So I reverted back to what it was, i.e. capital (Y).

The screenshots below show what exactly category and taxonomy pages look like:

I am screwed up as this is a completely new kind of issue I am facing. Google could not help either.

EDIT

My local development environment is running Ubuntu Linux and I am facing no such problem here! This is only happening on the server and that too with Categories and Custom Taxonomies only.

EDIT #2

1. WordPress version: 5.3
2. Plugin Status: No active plugin.
3. Theme used: twentytwenty
4. Server: Windows 2016

Console output

Network output

Answer 1

If you are using Google Chrome press Ctr+Shift+I and press the "Add New Featue" button in your page. See in Console and Network for errors.