Why does MySQL server 8+ create .ini config files in a MySQL server 5.5 folder?
After alot of digging I found the answer.

Inside %AppData%..\MySQL I found "server_instances.xml". For some reason it listed MySQL server version as 5.5 even though workbench AND command line both showed it is 8.0, and 5.5 was never installed in my machine.

I searched for all mentions of 5.5 and swapped them for 8.0. Saved, rebooted machine (just to be sure) and opened workbench. Created a new config file via the Options File under the Administration in workbench. Everything works :)