Hello all
I had the same issue and was able to fix it in 2 steps
1. Update the HUB FW through PyBricks (https://pybricks.com) to original LEGO FW as was suggested from @Repkovsky. This was a part of solution. Also on this site there is a step by step guide how to connect the HUB to PC and fix the device error via the windows "device manager".
2. After the device is setup correctly and is recognized by windows follow the steps in this link (https://dfu.pybricks.com/fix-update/)
This two steps reset my module to factory settings and was then able to upgrade latest FW in Mindstorms app (for the second time).
Annoying problem...
Hope this helps!