How do I enable Continuity for ABM users with Managed Apple Accounts and Microsoft Entra SSO?

Hello,

We are using ABM to manage our apple devices and have Managed Apple Accounts that our users are using to sign into their Macs and iPads. Continuity services are enabled and working, but some users are getting a message: "Unable to Connect to "iPad" The iCloud account does not use two-factor authentication".

We are using Microsoft Entra to manage the user, so they are signing in using SSO with Microsoft and the Two Factor requirements we have set up for Microsoft. So I don't understand why we would get that message, since there is no way to enable two factor on our Managed Apple Accounts.

Am I missing something in the setup for the user that would not allow continuity? I am confused because I have the same settings on my Managed Apple Account I use for my office Mac and iPad and can use the continuity feature with no issues.

Any suggestions on how to fix this?

Thanks

[Re-Titled by Moderator]