User Reference not working

Problem/Motivation

Unable to Assign user (entity reference) with this selected widget. After node is saved, user is not referenced even was selected.

Steps to reproduce

1. Add User reference field to content type (Article)
2. Add new article with referenced user
3. Save article and eveyrthing is fine as expected.
4. Change widget from the default one to Select With Search
5. Add new article with referenced user
6. Node is created but no user reference.
7. Update also article created in Step3 - Once updated - reference user dissapear.

I also notice, that the default value is always the first walue even I disable it in field config. However even there is from unknown reason the default value - it is always blank.

I am using D10 and Php 8.13 on clean installation.
Logs are empty.