I have the exact same problem, but am not going to fool with the registry keys. I have had a horrendous experience of getting everything installed correctly, trying to use first built-in diskpart and Disk Manager to partition and format a little known-good USB flash drive (that works perfectly on my wife's Windows 10 computer), assign a drive letter, etc. The funny thing is, the drive letter never gets assigned, even though everything else seems to be "normal." Even if I then go and assign it a letter on my wife's working W10 computer, when I bring it back to my W11 computer (latest preview build properly installed with no problems), ding! Same problem. USB Flash Drive not recognized. "A compatible driver for this device cannot be found." LOL.
I've decided to just consider this a failure of the current Windows OS; I have tried regressing, reinstalling from scratch, everything. BIOS detection and changes. Always end up here.
The rest of the computer is fine and stable, it's just so "protected" from the ability to use a flash drive on a USB port that I cannot use one for any purpose whatsoever. Maybe this is of use to people running Windows 11 to protect nuclear weapons sites from being hacked or something, but for the average user? Me? It's utterly ridiculous.
The hackers have truly won: Windows is now so "secure" it's unusable! I also have ridiculous problems with EA Games also because Epic Games' "Easy AntiCheat" (ha! When you see the name Easy in the title, you know you're in for trouble!) doesn't seem to get along with Windows Defender, at all. And EA Games relies on same, then goes ballistic if I try to Launch a game (I'm launching a game here, folks; not a nuclear attack!).
I've tried replacing Windows Defender with Norton 360, which I've used for decades, and it seems to get along with everything better, but it doesn't solve the problem and then spends a lot of time and resources spamming me with additional features I don't need and don't want to use.
I'm beginning to understand why some people refuse to use anything but a homebrew Linux OS for their purposes.
I hope Microsoft gets better, soon. So much is going right, now, it's a shame stupid little things like this are still so completely wrong.
/rant off.