@aaajani, I have no experience with IIS, but will add my 2 cents anyway…
You are starting 2 webservers: IIS and the webserver started by php -S localhost:8000 system/router. My guess is that IIS takes precedence. IIS works fine on port 80, but throws an error on port 8000. Probably because that port has not be defined.
Anyway, its just a guess…
Suggestion:
In this post, someone shows step by step how IIS + PHP has been setup. After solving an initial error, things run fine.
Try to follow the steps and see if it works for you. If not you might try Laragon which is said to work fine too.
It might be a good idea anyway to run you development on Apache, because most hosters run Apache.