Yubikey and Big Sur

Hi, 

I have a YubiKey 5C and use it on my 2018 MacBook Pro for login purposes. Everything was working okay. I cloned the drive to an external drive and upgraded to Big Sur. Since then I have had issues. 

With Big Sur the YubiKey is not even required for login. Once logged in, if I need to enter the password such as to adjust settings in System Preferences, the YubiKey does not work. It does not progress as if the password is wrong. I am sure I am entering in the correct password and have touched the YubiKey.

So far I have tried:

Booting from the clone drive to clone the internal drive but it does not progress past the password

Reinstalling a fresh copy of Big Sur it it also does it progress past the password

Check the security settings to be sure I can boot from an external drive but again won’t progress past password

Enter Time Machine on NAS Drobo but I can’t find it with IP

Enter Time Machine backup on an external drive but again it won’t find it

Fairly certain I used this document installing the key. Think I can disable the key for login and it allow me to access preferences? I don’t want to remove the key but not the requirement of using a key. I have a backup key that has the same results. 

https://www.yubico.com/wp-content/uploads/2016/02/Yubico_YubiKeyMacOSXLogin_en.pdf

I would like to entirely remove the YubiKey device if possible, hopefully I will be able to proceed after that. I would appreciate any help. I have tried to contact Yubico already.