The project manager should mentor the team to explain agile principles and create a shared understanding.
This will help the team to adopt an agile mindset, embrace the values and practices of agile approaches, and collaborate effectively throughout the project. The project manager should also provide feedback, coaching, and support to the team as they learn and apply agile methods. Evaluating the possibility of managing this project using a predictive approach, submitting a change request for a new team, and hiring a functional manager are not appropriate actions to address the situation, as they do not address the root cause of the confusion or help the team to develop agile competencies. References: = PMBOK Guide, 6th edition, pages
18-19, 27-28, 555-556; [Agile Practice Guide], pages 8-9, 13-14, 27-28; PMP Exam Content Outline, 2020, pages 6-7.

One of the key characteristics of agile development is iterative delivery of product increments, which allows for customer feedback and adaptation to changing requirements. To achieve this, the project scope needs to be broken down into smaller parts, each delivering a valuable and testable functionality. The first part should represent a minimum viable product (MVP), which is the smallest version of the product that can be released to the market and validated by the customers. This way, the project can deliver early and measurable value, and reduce the risk of building something that is not needed or wanted. References: Agile Methodology in Project Management as a Licensed PMP, Agile Guide to the Planning Processes - Agile Approach

For a complex project with a high degree of change, increasing the active engagement and participation of key stakeholders is crucial. This strategy ensures that stakeholders are involved in the decision-making process, which can help in managing expectations, gaining valuable insights, and fostering a sense of ownership among all parties involved. It also aids in identifying potential risks and changes early on, allowing for a more adaptive and responsive approach to project management.
:
PMBOKGuide - Sixth Edition.
The Standard for Business Analysis - PMI-PBA Guide.
Project Management Institute's resources on stakeholder engagement and communication.

In an Agile environment, the project manager's role is to empower the teams and make them self- organizing12. This involves helping the teams establish their own ground rules and ensuring adherence to these rules3. It's important to revisit these rules at regular intervals for continuous improvement2. This approach promotes collaboration, understanding, and strong leadership within the team1. It's also crucial for the project manager to have excellent communication skills, the ability to identify and analyze potential risks, and the ability to motivate and mentor individuals and teams3. References:
https://apmg-international.com/article/what-does-agile-project-manager-do
https://businessmap.io/blog/agile-project-manager

The project manager should work with the organization's legal department to identify local regulations to ensure project compliance. This is because the legal department has the expertise to understand and interpret local laws and regulations, which can vary significantly from country to country. By doing so, the project manager can ensure that the project is compliant with local laws, which will minimize potential issues with the local government. References: Project Management Professional (PMP) Reference Materials, PMBOK Guide, Chapter 2: The Environment in Which Projects Operate. Professional in Business Analysis Reference Materials, Chapter 3: Business Analysis Planning and Monitoring.