Azure File Share with Microsoft Entra Kerberos (The specified network Password is not correct)

Question

Hello everyone,

I wonder if someone can help or shed some light, with the Azure File share issue that we are having. We are testing Azure file share with Microsoft Entra Kerberos but the connection is very intermittent.

Majority of the time when try to connect from within the office with New-PSDive command we get the error message "The specified network Password is not correct". When we try to connect while connected via VPN, we get a different error message "The system cannot contact a domain controller to service the authentication request. Please try again later"

We are not sure why it is trying to contact a DC (when connected via VPN) to access Azure File Share, it should go straight to the internet to access it.

Already logged a call with Microsoft and have gone through all the pre-req checks and everything is set up as it should be. MS have collected all the necessary logs and checked the other things like kerberos keys etc but still nowhere close to a resolution.

Thanks in advance.