How to use version catalog in the root `settings.gradle.kts` file

You cannot.
That’s a hen-and-egg problem.
The feature is designed, so that a settings plugin could define a version catalog.
But that means that the version catalog can not define settings plugins because for that the version catalog would need to be available before the plugins are evaluated.
To define it in the version catalog, you would need to manually parse the TOML via some library or regex or whatever to pull out the information necessary to apply the plugin.

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