Hi @Vikas Prakash Mysore
Thank you for reaching out Microsoft Q&A Platform.
I understand that you are encountering issues with the authentication process in your Azure AD B2C custom policy setup and after registering a new user, when you try to authenticate, it says "Invalid username or password."
The reason for error 'Invalid username or password' will:
If the permissions to ProxyIdentityExperienceFramework is not setup correctly
If this permission is not added, sign-up works but sign-in fails with "Invalid username or password." error and in Azure AD Sign-in Activities, below error is logged:
Also, check if ProxyIdentityExperienceFrameworkAppId and IdentityExperienceFrameworkAppId are not added to the login-Noninteractive technical profile correctly and their value got interchange by mistake.
Even after trying above, you are facing the issue. You can use setup tool https://aka.ms/iefsetup to automate the process. You need to delete the proxyief and ief application first you created manually.Also, for B2C applications, you need to select 'Accounts in any identity provider or organizational directory (for authenticating users with user flows) only
Hope this helps, if you have any further queries do let us know.
Best Regards,
Harshitha Eligeti.