I had the same issue. I can confirm it is most likely user error.
When I installed the dmg on my Mac, there was a default settings popup, but in my case the Rancher Desktop window fully covered it, so I was not aware of that.
Since there was no resolution of this error, I did a factory reset.
After the factory reset the popup was visible, and asked for the admin password ( as expected ).
After this step my desktop worked properly.