Ok I found my error. The Member listing was already linked to another email address before I updated this. So I just started fresh with a new member/email and that worked.
Question though, is the login provided in the Member Login widget the same url as the wp-admin user login? Maybe it’s my web host but when I try to login through the widget I get a lot of ‘Page not found’ on the site/server. But if I just go to the wp-admin login page as regular user it works.