@shmo-MS,Thanks for posting in Q&A.
From your description, I know that your smart card token got some problem.
I know that you have tested on non-managed PCs and they worked fine. Could you please confirm us that whether the user has more that one device and one of them got an issue. If yes, we suggest that unenroll the issued device and test whether it can work fine.
If the targeted device still cannot work, there may be some problems on windows, we suggest that you contact Windows support to get more help. If the targeted device work fine, there may be some policies in Intune blocking it and you can unassign there policies.
Hope above information can be helpful.
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