About integrated Windows authentication on a desktop application

Question

We have an app registered in Azure Active Directory, and we're trying to use the 'Integrated Windows Authentication' method, but when we try to add our user to a Windows account to log in, we get this error:
'Looks like this isn't a Microsoft account. Try another email or sign up for a new one." I've been googling and it says that our account needs to be a federated account. I've looked for how to add this and it says that in the Accounts section of the portal, we just need to add it to the federation in the Authentication methods. But the 'Add authentication method' button is disabled. Then I added a new account, and when I click on the button, it only gives options for 'Email, Phone number, or Temporary Access Pass' - nothing about federation."