Platform: Xbox Series X
I’ve finished the game on “Path of the Damned” difficulty, went for the “Steel Garrot” ending but achievement for hardest difficulty didn’t unlock.

Tried to load and finish the game without siding with Steel Garrot but it didn’t help.

One thing to double check, did you ever play on the file on a lower difficulty level? It seems you have to go through the whole game on Path of the Damned Difficulty to get the achievement. if you can drop the difficulty down without getting a warning that it'll invalidate the path of the damned Achievement, than it's likely the file was flagged as having been on a lower difficulty at some point.

It's something to double check, even if you never dropped the difficultly, it could of some how ended up being set that way.