Microsoft 365 E5 - Windows 10 subscription activation for hybrid Azure AD joined devices

Do the users login on the machine with their azure credentials? (UPN)
Make sure they are!
Also check that windows 10 license tab is checked within the licensing tab on the users

Also I hit a wall doing this because of the licensing on the machines today for different reasons! Are you sure the machines have an active Win10 PRO license?
Try running this script on a test machine:

(Copy the text below into a .cmd file and run the file from an elevated command prompt:)
@echo off
FOR /F "skip=1" %%A IN ('wmic path SoftwareLicensingService get OA3xOriginalProductKey') DO (
SET "ProductKey=%%A"
goto InstallKey
)

:InstallKey
IF [%ProductKey%]==[] (
echo No key present
) ELSE (
echo Installing %ProductKey%
changepk.exe /ProductKey %ProductKey%
)
..........................................................
That solved it for me!

You seemed to get the join process right so you’re pretty close now :)