Guys, I have started questioning whether it is the UEFI/BIOS update that has caused this problem.
After reading about whatever everyone had to say, I found an older version of the Firmware. I manually installed it but type writter didnt bother to work even though the new version shows in device manager)
Then,
I downloaded the image of my surface, and re-did a full installation + removing all my files from it. Halfway before the format finished, I got a BIOS screen (different than the one we had already) and at the bottom of the screen it was the exact version
I installed earlier. That means that the installation I did was success since I could see the earlier version outside windows.
Windows installation finished without any luck from the keyboard (fails to work both on windows and in bios).
I then downloaded an even earlier version of the bios, tried that one (without going back and re-do the format) without any success again.
My guess is whatever they write, it then becomes write-protected, in such a way that even older BIOS images don't overwrite. Or maybe older BIOS were not writing anything on that memory location so it is left intact. That would make sense if we consider
the previous method someone posted that when you let the battery run completely off it works for a while.
I am planning to let the Surface run on Bios screen until Monday (3 days)and make sure the battery level goes as low as possible. (Running on bios minimize energy consumption hence will go super low before turn off).
Having a different firmware now, I hope that once the type-writter comes back, it will not go dead again.
Keep in mind that I have tried the "run flat" method, mentioned earlier, without any success at all.
If anyone has any idea to propose at the top of what I do, let me know.. it may be worth it trying it!
The strange think is that, when in device manager and disconnect/recconnect the typewritter, device manager seems to respond.. but then it doesnt work in BIOS, which is confusing.
It seems that microsoft has pulled a trick out of apple's book to force us upgrade (for those dont remember, apple was reducing the CPU power on their devices). At the bottom of the line, this surface was really good that after 5 years i didnt feel the need
to change it. That means Microsoft loosing money.
Will keep you posted on results from my little experiment