Unable to sign in with passkey

This issue fully blocks logging in. Originally it could be circumvented but that is no longer the case.

When signing into my Microsoft account with passkeys enabled, login never completes. I have let it run for over two minutes and it just keeps spinning. It used to offer to use a different method but doesn't anymore.

If I leave the window open in the background then eventually it seems to time out and let me use my password/OTP code however then I get this code: 0x80004005 code: Eroded Badlands