Do you remember
I do remember. I do not remember ever hearing of a case where the user's login works correctly in the terminal, but fails in sddm. That sounds like something is broken in the communication between the core system and the gui. If I had this problem, I think I would try to make a new user, and then see if that user can log in via the gui. If YES, then you can move all the needed files from the old user's home directory to the new User's home directory, and get back to productive work. If NO, then there's something broken between your KDE/Plasma desktop and the linux system underneath -- then you have a research project on your hands. OR, perhaps remove and replace all of plasma and needed kde packages. I hope it does not go that way.