ALTER USER WITH LOGIN throws error "Windows NT user or group not found"
This error will happen if the login you are attempting to use does not exist.

Example:

CREATE LOGIN username WITH PASSWORD = '131fEWF$#@FR$#Vverf';
CREATE LOGIN username2 WITH PASSWORD = '131fEWF$#@FR$#Vverf';

USE tempdb;
CREATE USER username FOR LOGIN username;

ALTER USER username WITH LOGIN = username2; /*Successful*/

DROP LOGIN username;

ALTER USER username WITH LOGIN = username; /*Unsuccessful*/


You should check to ensure that the login was not removed prior to your attempt to run the ALTER USER command.