So I was able to partially confirm this on latest master of ProtectSite w/ MW 1.43.0. I'm able to edit pages just fine but the account creation part indeed fails and throws an error message, despite that regular users should be able to create accounts.
The bug is most likely in ProtectSite#setup, likely related to these two lines:

			$wgGroupPermissions['*']['createaccount'] = ( $wgGroupPermissions['*']['createaccount'] ?? false ) && !( $prot['createaccount'] >= 1 );
			$wgGroupPermissions['user']['createaccount'] = ( $wgGroupPermissions['user']['createaccount'] ?? false ) && !( $prot['createaccount'] == 2 );

since changing the latter conditional to $wgGroupPermissions['user']['createaccount'] = !( $prot['createaccount'] == 2 ); does seemingly fix this issue, but I think it also reintroduces T273687.

Not sure how to proceed here, but one thing did come to mind as I was testing out this bug: perhaps ProtectSite would be better off using $wgRevokePermissions instead of $wgGroupPermissions? (After all, I'm fairly certain the only reason ProtectSite is still using $wgGroupPermissions is that it was written in the pre-MW 1.10 era or so, and compared to that, $wgRevokePermissions is a fairly recent addition to MW core.)