Hello Oliver Moscow
Thank you for contacting the Microsoft community Q&A support.
You are experiencing this issue because the user account you are trying to authenticate with doesn't exist in the tenant where you created the application.
From the error above, you are trying to authenticate with a personal account (live account) that doesn't exist in the tenant. You have to invite the user account to the tenant where you created the app registration by inviting the user account as a guest.
Follow this link for more information https://learn.microsoft.com/en-us/entra/external-id/b2b-quickstart-add-guest-users-portal
You can create a work account in the tenant and authenticate with this user.
Let me know if further assistance is needed.
Babafemi