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You wrote a lot of steps, and I don't think it's this complicated, but also I haven't tried using BIP39 passphrase (that's where the 25th word - feature is defined) on a Ledger.
Electrum and some other wallets call the passphrase a "seed extension", "extension word" or "13th/25th word". The BIP39 standard defines a way of passphrase-protecting a seed phrase. A similar scheme is also used in the Electrum standard. If a passphrase is not present, an empty string "" is used instead.
You just keep your existing 24 or 12 word seed backup, so you don't even need to access it for creating a password protected wallet.
Normally, you plug in your hardware wallet, enter a new password and you're in a new fresh wallet with new private keys and addresses.
When you want to restore that hidden / password protected wallet, you will need the 24 / 12 word seed backup AND that password that you chose.If you mistype the password, you will land in a new password protected wallet that is derived from the same 24 / 12 words
plus this new (wrong) password. So you've essentially created another password protected wallet. But it's not an issue. Just re-plug the device and enter the correct password and you will arrive in the wallet with your funds. You can have an unlimited amount of wallets, every one defined by its own password. Some people like to use this feature simply to have separate wallets on one device, so they use something simple that offers no extra security though. For example, the password 'savings' for their savings wallet, password 'shopping' for grocery shopping wallet, you get the idea
For security, don't use words or sentences, those can be bruteforced with wordlists.
The cool thing about this is plausible deniability. You can have one wallet only accessible through a password which has the majority of your holding while the wallet with password '' (empty password - the default and what is shown immediately when plugging in the device), can have a small amount.