The Playfab Unity Extension does not currently support signing in to an account that was created using "Create with Microsoft" (AAD authentication).
Workarounds currently include installing the PlayFabUnitySDK manually, or creating a second PlayFab account with a standard username/password (and adding it as an admin to your main project if you want to access the title through Unity).
Please consider support for signing in to MS accounts via the PlayFab EdEx.
It is currently possible to enable PlayFab 2FA on an account created using MS which also, separately, has 2FA enabled. That would need to be a consideration in the login flow.
