@Oussama Dhouioui Yes, that is an expected behavior. Microsoft has partnered with a 3rd party domain provider who requires direct payment. (This is the case for almost all 3rd party offerings in Azure). This means the VS Azure credits cannot be applied to these 3rd party offerings.
As outlined on this document, we do not support the purchase of Azure domains on credit-based subscriptions such as VS subscriptions.
I would not advise removing the spending limit and adding your credit card to see if it would work as others have tried. Once a spending limit is removed, it cannot be added back.
https://learn.microsoft.com/en-us/azure/app-service/manage-custom-dns-buy-domain#prerequisites