Based on the Correlation ID and Trace ID, I tracked the request in our backend database and found that the account you are using is doing Federated authentication. Federated authentication doesn't mean that you are using ADFS, you can use 3rd party IDPs such as Auth0, OneLogin etc.
Basically, if you see below redirect message while trying to sign-in via browser using the same account, you are using federated authentication.
If you are making an API call via an application like postman which can't do this redirection, credentials can't be verified and you get
invalid username or password error. Since this error is not very descriptive, there is an active feedback regarding this, which was shared by Marilee.
I would suggest you to create a new account with UPN like username@your_tenant.onmicrosoft.com to be sure you are not using federated authentication and test with that account. As your_tenant.onmicrosoft.com domain always use managed authentication, credentials are verified in Azure AD and no redirection to federated IDP is needed. That way you can isolate that the issue is due to federated authentication or not.
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