Hello @Sudesh Lutchman,
Yes, that would be correct currently Entra ID doesn't support passwordless authentication methods for B2B guest users through self-service sign-up user flows. The self-service sign-up user flows in Entra ID are designed to collect user attributes and then create guest accounts using email verification i.e. password-based authentication hence without password users won't be able to register.
Currently we do not have any exact timelines on the roadmap for enabling passwordless authentication in B2B self-service sign-up user flows, we would advise to post your requirement as feature request in the feedback portal Feedback-Azure
There is one workaround within Entra ID which could be utilized, if your application is registered in an Azure AD B2C tenant, you can implement custom policies that support passwordless authentication methods for guest users. This approach requires advanced configuration and development. Custom policies provide you the flexibility to modify the configuration as per your requirement.