I don't think this is an indexing problem.
I get the same when using Spotlight (command-space) to search.
To confirm this is not an indexing issue, what happens when you open Finder and use its search (magnifying glass at windows top right). Does that find files and folders? It does for me.
I believe this is a bug in Spotlight search (not Finder search, and not Spotlight indexing) macOS 26.0.1.
Do as
@Starfia says:
This works for me. Needs more testing but it might be only the process called "Spotlight" which needs to be killed.