Double-click to run .bat - Windows cannot find file

Recently (seemingly out of nowhere) my Windows 10 PC stopped running .bat files when I double-click on them. If I right-click and "Run as administrator" the files run. If I open a command prompt and invoke the bat file it also runs. This is true for every bat file I have tried in all of the different folders and drives I have tried.

For example, I created Test.bat in M:\Downloads\. The content of this file is just one command "pause".
This is the error message I get when double-clicking the file in explorer:


Right-click and "Run as administrator":


And from a command prompt:


I have tried the following:
1. File Association Fixer
2. Checked the system environment variable COMSPEC. It is correct: %SystemRoot%\system32\cmd.exe.
3. sfc /scannow - the result was "Verification 100% complete. Windows Resource Protection did not find any integrity violations."

Any ideas?

You could try the specific .bat file restorer provided by TenForums: Restore Default File Type Associations in Windows 10 - Windows 10 Customization Tutorials

Unfortunately the .bat file restorer did not fix the problem. Thank you for the suggestion.

If you right click on the file, select properties and look in the details tab - does it show the correct file name, file type and folder path?

Yes, the properties are all correct. This happens with any and all bat files, not just this test file.

I tried the proposed solutions in the technet thread, none fixed the problem.
User Account Control is set to "Never Notify".

I tried changing the file extension on my Test bat file to .cmd. The same issue occurs. It's not a file extension specific problem.

The default is Open

PATH system variable: