Thanks! Your guess was spot on. User had few flagged posts by moderators and one of them had a note added. After deleting the note I could then successfully delete user all users posts and user it self.
By the way, is the bug already fixed in default branch? Maybe it’s time for updates.
EDIT: note on version/build for reference of any others that maybe encounter similar issue: v2026.1.0-latest mid-January container build on default tests-passed branch.