This is strange, but it may only be a user account issue. If you want to check/troubleshoot, create a new user account and login to see how it behaves on the matter.
I wonder how Plasma/KDE system settings see this issue. Does it show the old settings, but not functioning, or something else?
I would suggest using localectl to check and set such settings.
It can set system-wide configuration, if run with sudo/root privileges.
Basic setting of keyboard layout with localectl
Use localectl to set keymap layout and switch.
Find available layouts and options
Are you in a Plasma session, or something else? If you have been using another DE/WM session on the same account, you may have some exports in dot files.
Did you try with a new user yet?
The relevant Plasma/KDE file is
$HOME/.config/kxkbrc
You may check its contents, delete/rename it and try again with KDE system settings.
Yes, I am in a Plasma session (X11), and I have not tried to create a new user. Indeed, the problem is solved, is seems that one of the above commands actually worked.
Thank you!
PS: the file $HOME/.config/kxkbrc now communicate with the KDE settings.