I'm running into the above error when I run the untouched Blazor project.
A lot like this post HTTP Error 500.24 - Internal Server Error : system.web/identity@impersonate is set to true
Difference is there's no "web.config" file. Updating the "web.config" file to having the following piece of code in Core and MVC worked.
<system.web><identity impersonate="false"/></system.web>