According to current docs all business-oriented Microsoft Entra ID accounts support only device-bound passkeys. So the Microsoft Authenticator app isn’t absolutely required, a FIDO2 hardware token like a Yubikey or even TPM-backed Windows Hello is supposed to work for these passkeys too.

Software-based “syncable” passkeys (such as Bitwarden) have been on the roadmap for 18+ months but are still not available for business MSFT Entra ID accounts for some reason.