16.1 migration problem

I also don’t use the display-manager-legacy.service. I only use the native sddm.service. I’m not sure if it is impacting here.

Anyway, that can be done with

sudo systemctl disable display-manager-legacy.service
sudo systemctl enable sddm.service
sudo reboot

None of the above suggestions worked for me. I did an experiment on migration from a 15.6 vm.
Old results:
16.1 installed from .iso works ok
16.1 produced by migration from 16.0 fails as above
New results:
16.1 by migration from 15.6 fails
16.0 by migration from 15.6 succeeds!!!
So some combination of virtualbox, opensuse-migration-tool and 16.1 as a migration target leads to a screwup.

Question: has anyone successfuly installed 16.1 by migration from a previous version on hardware, as opposed to a vm?

Well it (16.0 → 16.1 via opensuse-migration tool) worked for me, so something specific to your setup it seems.

On hardware or vm? If vm, virtualbox or other?

As already mentioned above VBox guest environment.