Under my testing, when Visual Studio creates a project, it first attempts to read:

%USERPROFILE%\Documents\IISExpress\config\redirection.config

If this file is not found, it then checks:

C:\Program Files\IIS Express\config\templates\PersonalWebServer\redirection.config

Based on your description, it is recommended to verify the permissions for redirection.config. If there are no "deny" permissions set, the issue may be caused by an internal error with IIS Express. In that case, reinstalling IIS Express in VS installer is recommended.