How do I set up Sidecar on my new MacBook Air

I have a new 13-inch MacBook on Sonoma.

I've tried to set up Sidecar, however, when I get to the step where I'm supposed to add my iPad Pro in Displays, it always says "The iCloud account does not use two-factor authentication."

This is annoying; I've checked my account and two-factor authentication is turned on on my Apple ID. I've checked the iCloud app and I don't see anything about two-factor authentication.

My Macbook and iPad fits the rest of the additional requirements.

[Re-Titled by Moderator]