Update your workertools image to octopuslabs/azure-workertools 2.64.0 or later. The incompatibility is between the Az.Accounts module version and the worker tooling, not your OIDC configuration, so do not rework the Azure account setup. If you pin workertools versions, bump the pin and re-run the failing deployment to confirm auth succeeds.

Context: GitHub issue OctopusDeploy/Issues#8504 (closed): Azure PowerShell steps using Az.Accounts 2.12.5 or later fail authentication at deployment time with OIDC accounts, when Disable-AzAutoContextSave is set. A commenter confirms the fix: updating to the latest workertools image resolved it.