@AIM Technical Welcome to Microsoft Q&A Forum, Thank you for posting your query here!
Firstly, apologies for the delay in responding here and any inconvenience this issue may have caused.
Service principal is used for interacting with Azure APIs, this is required by AKS. Refer to this article How setup the PVC with Azure File share and there is no option to use the SP there, The SP is used for internal authentication by the cluster. PV would not require additional SP while setting up.
Kindly let us know if you still have more questions on this. I wish to engage with you offline for a closer look.
Hope this helps!
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