A Microsoft desktop and app virtualization service that runs on Azure. Previously known as Windows Virtual Desktop.
Had this same problem. The MilitaryCAC site had my answer under "Problem 5" on their Azure Virtual Desktop page: https://militarycac.com/avd.htm
Specifically, my problem was due to using a reader with known issues:
-Zoweetek ZW-12026-1 -Rocketek -IOGEAR USB-C Smart Card Reader (TAA compliant)
I changed to a different card reader as per Solution 5-2, then applied Solution 5-1 (unsetting, then resetting the "Smart cards" device under my connection's settings) and I was able to see my smart card certificates using the "Manage user certificates" app in my virtual desktop.