U2723QE, MacBook, USB-C hub drawing too much power

I have got my U2723QE connected with my MacBook Pro M1 2019 14". I want to use my monitor as USB hub thus I have connected my keyboard and mouse via USB 3 ports to the monitor but my keyboard does not light up. When I connect the keyboard to my monitor (which is connected to the mac USB-C) then this message pops up on my OS: USB drawing too much power. Then it blocks both my mouse and keyboard connected to the Dell monitor.

Further details of my system and what I have tried already:

• Using latest Sonoma OS update
• Using latest Dell firmware: M2T105
• My keyboard is a recently bought Keychron K2
• Everything is working fine if the keyboard is connected to the mac directly via usb-c and the monitor via usb-c as well
• The mouse or other usb periferials are working properly with the dell monitor
• The issue is the same regardless of which USB port is being used on the monitor to connect with the keyboard
• The issue is the same regardless of which USB-C port is being used on the Mac to connect with the monitor
• The monitor can charge other perferials with battery like iPhone, bluetooth headset
• If I remove the mouse from the monitor and only the keyboard remains the issue is the same
• If I disconnect the monitor from the mac then my keyboard lights up immediately
• The mac is not connected to other power source, only to the usb-c charging monitor
• I have tried with and without the Dell display manager software, the issue is the same
• I have tried to factory reset my keyboard, issue is the same

I would appreciate any support with this issue. My goal is to have only USB-C connection between the monitor and the macbook and have 2 periferials (mouse + keyboard) connected to the monitor.

I cannot figure out why this error message pops up because the monitor via USB-C suppose to charge my macbook instead of try to draw power from it.

Thanks in advance.