#3348 uses token auth because the azurerm_virtual_machine resource doesn't store the vmId in its state.

azurerm_virtual_machine is deprecated in favor of azurerm_linux_virtual_machine which does expose the vmId, but it does not yet support binding managed disks prior to startup, meaning we can't use cloud-init to format the volume and mount it as the homedir.

This issue has been around since 2020: hashicorp/terraform-provider-azurerm#6117

It might be possible to revive the work, or use one of the workarounds in there.