Can External ID (CIAM) federate to an Azure AD/Entra ID tenant using SAML?

The issue isn't with your SAML configuration. The limitation is that External ID (CIAM) doesn't support federating to Microsoft Entra ID (organizational) tenants as an external identity provider using SAML.

The reason the configuration is accepted in the portal is that the SAML IdP configuration itself is valid, but the sign-in experience doesn't treat another Microsoft Entra tenant as a supported external SAML identity provider. As a result:

• The SAML provider doesn't appear in the user flow.
• Home Realm Discovery isn't triggered for the Entra domain.
• Entering a corporate email address doesn't initiate federation.

If your goal is to allow users from another Entra tenant to sign in, the supported approach is to use Microsoft Entra B2B collaboration (guest users) rather than attempting to federate the partner's Entra tenant into your External ID tenant.

If you need true federation with SAML, the IdP must be a supported third-party SAML identity provider (for example, ADFS, PingFederate, Okta, Shibboleth, etc.), not another Microsoft Entra ID tenant.

If this resolves your issue, please consider marking the answer as the solution so it can help others facing the same problem.