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Another thing is I can successfully run any app by going to it's folder and executing it's Win32 EXE file, i.e. C:\Program Files\WindowsApps\Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe\WindowsTerminal.exe will successfully launch Terminal.

Meanwhile I can successfully run any app by going to it's folder and executing it's Win32 EXE file, i.e. C:\Program Files\WindowsApps\Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe\WindowsTerminal.exe will successfully launch Terminal.

I've tried troubleshooting (sfc /scannow, DISM /Online /Cleanup-Image /CheckHealth, WSReset, resetting apps individually via Settings, re-registering all apps for all users using PowerShell command), I've also set full permissions of %ProgramFiles%\WindowsApps and %LocalAppData%\Packages to Administrators.

I've tried troubleshooting (sfc /scannow, DISM /Online /Cleanup-Image /CheckHealth, WSReset, resetting apps individually via Settings, re-registering all apps for all users using PowerShell command), I've also set full permissions of %ProgramFiles%\WindowsApps, %LocalAppData%\Packages, %ProgramData%\Packages to Administrators & Everyone.

Event Viewer reports two consecutive errors whenever I click icon in Start Menu, this is a whole sequence of events (happen in 2 seconds) from Event Viewer > Applications and Services Logs > Microsoft > Windows > AppModel-Runtime:

Destroyed Desktop AppX container cbdebc96-9651-11ed-926f-88665a3ad365 for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe.

0x800700B7: Cannot create the Desktop AppX container for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered configuring the runtime.

0x800700B7: Cannot create the process for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered while configuring runtime. [LaunchProcess]

AppModel Runtime status for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe for user PC\Administrator successfully updated to 0x20 (previous status = 0x0).

AppContainer onecore\ds\security\gina\profile\profext\appcontainer.cpp Line:1812 @{Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe?ms-resource://Microsoft.WindowsTerminal/Resources/AppStoreName} Microsoft.WindowsTerminal_8wekyb3d8bbwe was not created because it already exists.

AppModel Runtime status for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe for user PC\Administrator successfully updated to 0x0 (previous status = 0x20).

Destroyed Desktop AppX container cbdebc97-9651-11ed-926f-88665a3ad365 for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe.

0x800700B7: Cannot create the Desktop AppX container for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered configuring the runtime.

0x800700B7: Cannot create the process for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered while configuring runtime. [LaunchProcess]

Event Viewer reports two consecutive errors whenever I click icon in Start Menu, this is a whole sequence of events (happen in 2 seconds) from Event Viewer > Applications and Services Logs > Microsoft > Windows > AppModel-Runtime (I added event ID and time to each event manually to minimize post size):

15:55:05 [Event ID 217] Destroyed Desktop AppX container cbdebc96-9651-11ed-926f-88665a3ad365 for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe.

15:55:05 [Event ID 216] 0x800700B7: Cannot create the Desktop AppX container for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered configuring the runtime.

15:55:05 [Event ID 208] 0x800700B7: Cannot create the process for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered while configuring runtime. [LaunchProcess]

15:55:05 [Event ID 70] AppModel Runtime status for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe for user PC\Administrator successfully updated to 0x20 (previous status = 0x0).

15:55:05 [Event ID 40] AppContainer onecore\ds\security\gina\profile\profext\appcontainer.cpp Line:1812 @{Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe?ms-resource://Microsoft.WindowsTerminal/Resources/AppStoreName} Microsoft.WindowsTerminal_8wekyb3d8bbwe was not created because it already exists.

15:55:06 [Event ID 70] AppModel Runtime status for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe for user PC\Administrator successfully updated to 0x0 (previous status = 0x20).

15:55:06 [Event ID 217] Destroyed Desktop AppX container cbdebc97-9651-11ed-926f-88665a3ad365 for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe.

15:55:06 [Event ID 216] 0x800700B7: Cannot create the Desktop AppX container for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered configuring the runtime.

15:55:06 [Event ID 208] 0x800700B7: Cannot create the process for package Microsoft.WindowsTerminal_1.15.3465.0_x64__8wekyb3d8bbwe because an error was encountered while configuring runtime. [LaunchProcess]