Hi chandra,
The failure is specific to your custom FIDO2 key's AAGUID not being recognized by Windows as a trusted authenticator for primary authentication, even though it passes web registration. The Yubikey works because its AAGUID is pre-trusted by Entra ID.
Check the AAGUID of your custom key in the Entra ID Authentication Methods activity logs. Filter for sign-in attempts with cFIDO; if the AAGUID is listed as "noncompliant" or lacks a "fido2SecurityKey" attestation type, Windows logon will reject it. You must add the custom AAGUID to the tenant's trusted FIDO2 security key list via Entra ID > Protection > Authentication methods > Policies > FIDO2 Security Key > Configure. If the AAGUID is not whitelisted, device logon fails.
Ensure the key is registered under the user's security info as a "FIDO2 security key" and not a "passkey." Passkeys bound to Microsoft accounts are invalid for Entra join. Use PowerShell with the MSOnline module to verify the registration type: Get-MsolUser -UserPrincipalName <user> | Select-Object -ExpandProperty StrongAuthenticationMethods should show "FIDO2SecurityKey" for both keys.
If the AAGUID is trusted and registration correct, the issue may be in the key's firmware or attestation certificate. Windows requires valid FIDO2 certification for lock screen use. Test cFIDO on another Entra-joined device to isolate the fault.
I hope you are clear with the information, and it's really appreciated of you to accept the answer to help build the community by sharing your experience with the issue. Thanks!
Vivian