I FIXED IT!!!!
I purchased three Windows 11 devices for family members for Christmas. I performed clean installs on all of them. Two of them are 2-in-1 units. One installed perfectly without issue. The other installed almost perfectly, with the exception of this issue.
The checkboxes cannot be disabled and compact mode cannot be enabled.
Windows 11 determines if a unit is in tablet (touch) mode and sets checkboxes ON and compact view OFF, all on it's own. Which makes sense. And is great, when it works. But like you, mine was stuck in this mode despite having a keyboard connected and not rotated.
After trying to force it into "laptop mode", I finally started disabling services and killing processes.
First I updated all of the drivers by going to Settings > Windows Update > Advanced Options and installing Optional Updates which included drivers and BIOS... then rebooted.
Finally in the registry, set to run on startup is the "Realtek Audio Universal Service". I deleted this registry entry and BINGO!!! It works.
Right click on the Start button and click RUN.
Then type "regedit" and hit enter.
Select and highlight the HKEY_CURRENT_USER node and then type CTRL+F or Edit>Find.
In the "Find what" box, enter "run" with the quotes.
Check Keys, uncheck Values, uncheck Data, and check "Match whole strings only".
When you come across an entry with value="RtkAudUService"... delete it.
Restart.
Fixed.