Managing personal Outlook.com account settings, security, and privacy
Hi,
Your Microsoft account is locked in security key-only mode, which means the system won’t accept your password because it expects a FIDO2 USB key. This usually happens if passwordless sign-in or a security key was added to your account settings.
The fix is to recover your account using backup verification (email, SMS, or recovery codes) via Microsoft Account Recovery, then remove the security key from your Security Info page and add alternative methods like Authenticator or SMS.
If recovery options aren’t available, you’ll need to contact Microsoft Support for identity verification so they can reset your sign-in methods.
I hope this helps!