Application Verifier fails to start on 3 separate Windows machines here

I managed to run the verifier under a SYSTEM account using PsExec:

...PsTools\PsExec64.exe -i -s C:\Windows\System32\appverif.exe

I asked Microsoft employee Gov Maharaj (from application compatibility team) and they already know about the issue and the issue is fixed in an update for the Windows 10 2004 SDK which was released in December 2020 (19041.685.201201-2105.vb_release_svc_prod1_WindowsSDK.iso):

The Windows 10 SDK, Version 2004 SDK servicing update (released 12/16/2020) contains the following fixes. If you encounter these issues, we recommend that you update your version of the SDK as soon as possible to avoid them:

• Resolved issue that prevented AppVerifier from working

Download and install the update to fix it.