Hello Osis, Andrejs,
Thanks for your question.
It looks like the displayname already exists in salesforce so it is counting as a duplicate user. You need to verify that the user is not already created with the same displayname in salesforce.
If it is, you have to remember in automatic provisioning the soource is entra, so you need to remove the user from there and unassign the user from the app in entra as well You can then re-assign using https://learn.microsoft.com/en-us/entra/identity/enterprise-apps/assign-user-or-group-access-portal?pivots=portal
This is a common issue documented here: https://learn.microsoft.com/en-us/entra/identity/saas-apps/salesforce-provisioning-tutorial?source=recommendations
The user can't be provisioned because it has a Salesforce.com 'Username' that's duplicated in another Salesforce.com tenant. In Salesforce.com, values for the 'Username' attribute must be unique across all Salesforce.com tenants. By default, a user’s userPrincipalName in Microsoft Entra ID becomes their 'Username' in Salesforce.com. You have two options. One option is to find and rename the user with the duplicate 'Username' in the other Salesforce.com tenant, if you administer that other tenant as well. The other option is to remove access from the Microsoft Entra user to the Salesforce.com tenant with which your directory is integrated.
You can mark it 'Accept Answer' and 'Upvote' if this helped you
Regards,
Abiola