Hi!, This usually happens because Microsoft is requiring updated security information for the account, not because Hotmail is forcing a passkey specifically. If the screen says ‘Help us secure your account’ or asks you to make sure you can receive a security code, Microsoft may block sign-in until you add or verify a recovery method. There can be a temporary skip option for some notices, but after 7 days from the first notice, you must verify or add new security info before signing in again. If there is no skip option now, there is unfortunately no supported way to ignore it permanently. To regain access, add one accessible backup email or phone number, complete verification, then review your methods later at account.microsoft.com/security and remove any passkey you do not want to keep.
It is important because that extra method is what Microsoft uses to prove it is really you if there is an unusual sign-in, if you forget your password, if your account gets locked, or if someone tries to take it over; security info such as an alternate email, phone, or another sign-in method is used for both verification and account recovery, and passkeys add stronger phishing-resistant protection than a password alone, so even if someone learns your password they still should not be able to access the account without that second method.