To replicate, you must have an icloud account that uses hardware key as 2FA. The following is the expected behavior
Open browser and go to https://icloud.com.
Log into your Apple account.
The site will prompt you to press the button on the hardware key and also prompt you for the hardware key's PIN.
User enter the PIN and the browser logs you into the apple account.
However, if the enpass extension is installed, step 3 does not prompt for the pin and there is a spinning progress circle that never goes away. It is definitely the enpass extension, since removing it allows it to work. The following are the configuration
Platform: Apple M1, MacOS Sonoma 14.5
Enpass desktop version: 6.11.0
Enpass Extension version: 6.9.4.1