Thank you for posting this in Microsoft Q&A.
I'm sharing this screenshot to ensure that we are on the same page and that you are encountering the same error that I have.
Please confirm the type of account used in this scenario, Guest or Member? The error mentioned above suggests that a Guest user account is being used for configuration and please verify the type of tenant currently in use, whether it is Microsoft Entra ID or a B2C tenant.
Thanks,
Navya.