Hi @v_deepanon.
That is the cause of the "PermissionError(13, 'A device attached to the system is not functioning.', None, 31)" upload error you encountered.
Leave the configuration as "Normal mode (TinyUSB)" and then do a standard upload (either by clicking the "Upload" button on the Arduino IDE toolbar, or by selecting Sketch > Upload from the Arduino IDE menus), not an "Upload Using Programmer".
Let us know if the upload still fails when you do the standard upload.