2 part question... What is this thing called and why don't my 2025 settings import to 2026?

Are we looking at an Application Frame issue here guys?  I'm a Windows user so have almost no experience with the Mac AF, but it looks to me that the main Photoshop window is not maximised, and that's why the OP is seeing the desktop (my green chevrons) behind the Photoshop background.

That sliver of grey (my yellow highlight) might be part of the Select & Mask panel, but I'm thinking probably not because it is slight offset  from the S&M panel, and that panel should be in front of the PS window — so it is likely unrelated.

Does the OP just need to maximise the PS window to fix things?

Because you’re a Mac user, it might help to recognize that the Application Frame in Photoshop is more consistent with how macOS apps work today. All of the current Apple productivity apps (Photos, iMovie, Keynote, Pages, Numbers…) use an application frame by default: Everything happens in a “parent” application window, and with few exceptions panels must be docked to that frame and cannot float.

Because Photoshop was originally released in 1990, it started out using the old Mac paradigm where there is no application frame and all windows and panels float. In today’s Photoshop, you can still get that by disabling Window > Application Frame.

In the screen shot you attached, it looks like Photoshop is operating in sort of a hybrid mode, where the Application Frame is on, but all the panels are floating. It’ll be less confusing if you either use the Application Frame enabled with all panels docked (the current Mac standard), or the Application Frame disabled with all windows and panels floating (the old 1980s standard).

The interesting thing about this is that for Apple’s own current Mac productivity apps, you generally don’t have a choice: Their “application frame” is permanently on. Photoshop actually gives you the choice to turn it off, and run Photoshop like in the old days.

Without a frame, an artist 's canvas will collapse.  One holds the canvas by the frame.

The canvas is the workspace [aka Jane's proper name is Application Frame] for creating and editing images or designs.

The canvas/Application Frame is no accident; it's how you set up the appropriate dimensions and resolution of your workspace.

One can have multiple canvasses on the screen, in order to switch between them, layer them, manipulate them...

Sittle, your screenshot shows a white/blank canvas. But one can create a transparent canvas -- how would you represent that; how would you find it to work with it?

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Q2:

Migrate presets, actions, and settings

Read the sections

• Migrate presets
• Migrate presets while updating Photoshop
• Migrate presets after installing/updating Photoshop

"By default, when you update to the latest version of Photoshop using the Creative Cloud desktop app, your presets, settings, and preferences are migrated from the earlier version of Photoshop. Also, when you launch Photoshop for the first time, you're prompted to migrate all available presets from the most recent version of Photoshop installed on your computer."

Although you missed the chance to update and migrate presets, all is not lost. Just follow the section, 

Migrate presets after installing/updating Photoshop.