I too was seeing this issue after adding a Dell D3100 dock to my setup. Took me a while to realise that the lid being open or closed was the key ('scuse the pun) to it all.
Found a post on a Dell forum recommending LidNotifyReliable ( https://www.dell.com/community/XPS/Windows-Hello-with-lid-closed/td-p/7415687 ) and that key led me here.
Added the reg setting and Yubikey now works fine. No reboot required.