Zend certified PHP/Magento developer

Magento 2 category shows all catalog products instead of its actual products after setting its layout to a custom layout

I have the following issue with a magento 2.4.3 category:

Using the default theme (having the category’s Design/[No layout updates] option selected), it properly shows its products and their number:

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but after updating the category’s Design/[Custom Layout Update] to a custom layout, Magento shows in frontend all catalog products as if it is the root category. See picture below:

enter image description here

Any idea on how to fix this? Has anybody seen something similar?