Good news. I guess the most recent [Testing Update] 2025-11-10 update did fix the issue somehow.
When I revisited my prior GNOME boxes installation (where I switched backed to ‘stable’ to get it running again) and did another switch to the ‘testing’ branch, everything worked fine/gdm was running without any issue. Reached runlevel 5, logged in (automatically) and GNOME was up and running.
Haven’t done anything in particular. Just miraculously works all of a sudden. Phew! 