According to Error yaml: control characters are not allowed - #7 by pekac45 and .fly/config.yml corrupted on Windows (control characters not allowed) · Issue #908 · superfly/flyctl · GitHub, deleting that ~/.fly directory and fly auth login should resolve your issue. Not sure why you’re still getting that error if that directory doesn’t exist.
My only guess is, that directory still exists, but whatever ui you’re on isn’t showing it. Can you run rm -rf ~/.fly (or the equivalent for your OS) and try again?