Your Windows environment uses Gtk 4.16 but support for inline menu definitions like in your UI example was not added before Gtk 4.17. See Gtk news:
Do read these news files; they provide valuable information.
And do handle errors when loading UI files. Your C example doesn’t, and hence fails silently. Had you passed an error pointer to the gtk_builder_add_from_file call you might have seen a similar error as in your Rust code.
Your Rust code crashes because you’re calling gtk::Builder::from_string, i.e. gtk_builder_new_from_string which explicitly crashes when given an invalid UI definition.
For backwards compatibility define the menu separately, and then reference it by name in the menu-model property definition. Roughly like this (untested):
<?xml version='1.0' encoding='UTF-8'?>
<interface>
<requires lib="gio" version="2.0"/>
<requires lib="gtk" version="4.12"/>
<object class="GtkMenuButton" id="button">
<property name="menu-model">test-menu</property>
</object>
<menu id="test-menu">
<item>
<attribute name="action">window.close</attribute>
<attribute name="label">Close Window</attribute>
</item>
</menu>
</interface>