Yes, I see the issue here @Vede. I believe there is an OS-level limitation here, quoting from https://forums.developer.apple.com/forums/thread/723273:
In iOS 16, passkeys can be used in a
WKWebView
if the client app is using Associated Domains for the relying party.
We don’t have Associated Domains for all sites configured in DiscourseHub, hence, the passkey negotiation fails early.
I think the right solution here is to force the login process within the webview to use the same mechanism as when pressing the “Connect” button. It solves this and a few other authentication issues. (In the meantime, you can try authenticating on the site in DiscourseHub using the “Connect” button. Swipe right-to-left if you don’t see it and click the blue user icon button.)