FSLogix Error 1326 The username or password is incorrect

Hi all,

I need your help with this one. I am currently implementing FSLogix in an AVD environment, as I did dozens of times before. But this time I ran into a strange Issue.

The error I am getting is: 

My current setup is:

- Hybrid joined VMs

- Storage account joined to OnPrem 

- Active Directory Domain Services (AD DS) Identity is enabled on the storage account via Terraform

- All Users and Groups are hybrid 

- Azure Infrastructure is deployed with Terraform

- Hosts and Users are managed via GPOs

I already found this Tech Community Post, but the suggestions there unfortunately did not help me.

My troubleshooting steps up until now where:

• Redeploying the storage and the VMs 
• Checked FSLogix, NTFS and IAM settings
• Deploying an Microsoft Entra Kerberos authentication enabled storage account -> same issue
• Checked that the Kerberos encryption algorithm of the client and the storage match -> client allows all algorithms, storage is set to max compatibility
• Created a new computer object in the domain and used it for the domain join via Terrraform
• Checked that storage account is joined to AD -> here I got an interesting find:
  • 
  • Here the AccountType and SamAccountName are missing,
  • I checked this in another environment, there they are displayed correctly
  • BUT this does not explain to me why the Entra Kerberos enabled storage account got the same error

Many thanks for reading all of this. Do you guys have any ideas and suggestions what I could try?