Hi,
Based on the information provided and the current setup, it seems that the existing Azure AD applications are still tied to the classic CMG deployment. When setting up a new CMG with VMSS, you typically need to register new Azure AD applications because the CMG setup process involves creating Azure AD app registrations that are unique to the CMG service.
However, if you're looking to reuse the existing web app and native client app registrations, you'll need to ensure that they are not already associated with another CMG service in your tenant. If they are, you might encounter issues as Azure AD will not allow duplicate registrations for the same tenant.
If the issue persists, you might want to consider reaching out to Microsoft CSS or Azure specialists for additional insights and support.