How come when I attempt to sign in from the App Store itself using my Apple ID account it says Two Step Verification needed Try Again or Don’t Sign in.
However, when signing in to my Apple ID account from the Settings app, I’m able to sign in using my security key without any issues.
How come I’m not able to do this from the App Store itself?
I went here for more information.
Physical security keys provide extra protection for your Apple ID against phishing attacks.
In the section
What doesn’t work with Security Keys for Apple ID
There is no mention of App Store being affected.