Guitar as Transposing instrument

Nothing I said is wrong, so there is nothing to disagree with :-).

Key signatures are no different from notes as far as any of this goes. If you entered a C major key signature, MuseScore assumes (as is the case in the vast majority of cases where people change transposition after already starting a piece) that this is the correct sounding key. So again, do the transpose to fix the key if you for whatever reason entered the wrong sounding key. Keys always need to be entered as the sounding key, regardless of whether you do it before changing transposition or after, or whether concert pitch is on or off - consider they may not be the same from staff to staff anyhow so there would be no way to specify the correct "written" key in an ensemble score anyhow.

Now, I suppose you might be saying that in your particular use case, it does happen to be more common to first enter notes the way you want to play them and then change how you want them to sound. That's unusual in the grand scheme of things (consider, the more common use case would be someone writing music for flute than deciding they want to play it on saxophone, they need the sound to stay the same but have the written pitches transpose). But no matter if your use case differs from the norm - MuseScore supports this as I said, just use Notes / Transpose, which will happily transpose the keys to.

You told MuseScore to transpose the written pitch, not the sounding pitch. When Concert pitch is turn off (transposed pitch is on) you see the transposed written pitches. If you want to see and play a D but hear a d-flat you need to transpose in the opposite direction and enter the concert pitch key signature to get a key signature of C for your transposed instrument. Insert the key of D-flat and you will have the transposed key of C.