O365 Integrated windows authentication(IWA) using MSAL VDI not domain joined issue

Question

We have encountered an issue when we try to receive access token for graph api using IWA we get an error that VDI is not domain joined: {"AADSTS53001: Device is not in required device state: domain_joined. Conditional Access policy requires a domain joined device, and the device is not domain joined.}

dsregcmd/status

As I understand the device is domain joined from this screenshot. I can provide more information from dsregcmd/status if needed.

The users that are trying to generate token are all federated.

The code that we are trying to use :

ApplicationInfo appInfo = new ApplicationInfo()
            {
                ApplicationId = clientId,
                ApplicationName = appName,
                ApplicationVersion = "1.0.0"
            };

 var authorityUri = new Uri(authority);
            authority = String.Format("https://{0}/{1}", authorityUri.Host, tenantId);
 _app = PublicClientApplicationBuilder.Create(_appInfo.ApplicationId).WithAuthority(authority).WithDebugLoggingCallback().WithDefaultRedirectUri().Build();

string[] scopes = new string[] { "https://graph.microsoft.com/.default" };

String accessToken = _app.AcquireTokenByIntegratedWindowsAuth(scopes).ExecuteAsync().Result.AccessToken;