if I understand correctly it seems like you are trying to use a custom domain for your Azure web app and you are facing issues with the JWT security token? how did you set your audience and issuer to your custom domain?
No you don''t need to be in production for it to work. you need to make sure that the custom domain is properly configured in Azure. You can follow the steps in the tutorial "Tutorial: Register a web application in Azure Active Directory B2C" to learn how to register a web application in Azure Active Directory B2C using the Azure portal.
hope that helps.