I've recently moved from the Windows 7 system where I saw the problem to a Windows 10 system where Kleopatra works. As Windows 7 will no longer be supported by Microsoft, there seems little point in working on this issue, so I'd be happy if it was closed as Won't Fix.

The self test error message looks like it originates from https://github.com/KDE/kleopatra/blob/master/src/selftest/enginecheck.cpp

gpg -k works and displays the list of keys I expect. gpgsm -k returns nothing.

On reviewing the bug report I realized I had included the wrong section of the Kleopatra log. I cleared the log file and ran Kleopatra again to get the correct log entry for the version of gpg4win in use. Here it is: