@tflidd It’s a bit difficult for me to answer the question. I have been dealing with keys for only half a year. I am not a security expert and I must say that I find both abbreviations and concepts very confusing. I’ll try my best to answer your questions:
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For Nextcloud, I’ve been using FIDO2 (for me: passwordless login) since Nextcloud version 19. Unfortunately, I don’t know well enough to say whether U2F or OTP are also part of the process. Someone who knows this better than I do would have to comment on that. But I can say with certainty that I have not installed any additional apps for authorizations.
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If the question is about how I use the Yubikey, I can tell that I use OTP, challange response, two-factor authorization, smartcard, etc… for various services. But nothing has changed there before and after the Nextcloud update. Other FIDO2 services are still working. Also, if Nextcloud allows key registration (see my procedure), authorization should work too.
I hope this helps with clarification and we find some further steps for trouble shooting.