[BUG] VisualStudioCredential fails with AADSTS65002

Library name and version

Azure.Identity 1.4.0 or later

Describe the bug

Looks like #8945 came back again for Azure.Identity 1.4.0 or later. The DefaultAzureCredential stopped falling back to other credentials after it failed with the ManagedIdentityCredential.

Here is the exception message

Unhandled exception. Azure.Identity.CredentialUnavailableException: DefaultAzureCredential failed to retrieve a token from the included credentials. See the troubleshooting guide for more information. https://aka.ms/azsdk/net/identity/defaultazurecredential/troubleshoot
- EnvironmentCredential authentication unavailable. Environment variables are not fully configured. See the troubleshooting guide for more information. https://aka.ms/azsdk/net/identity/environmentcredential/troubleshoot
- ManagedIdentityCredential authentication unavailable. The requested identity has not been assigned to this resource.
Status: 400 (Bad Request)

Content:
{"error":"invalid_request","error_description":"Identity not found"}

Note that this happens on a VM from the DevTest lab. The fact that it’s an Azure VM may have confused the library. When I downgraded Azure.Identity to 1.3.0 or earlier, everything worked like a charm.

Expected behavior

DefaultAzureCredential falls back to other credentials after failing with ManagedIdentityCredential

Actual behavior

DefaultAzureCredential doesn’t fall back to other credentials after failing with ManagedIdentityCredential

Reproduction Steps

Use DefaultAzureCredential on an Azure VM from the DevTest lab.

Environment

Windows 11, VS 17.4.0 Preview, .NET 6 app

[zhenlan]

Updated Visual Studio to Version 17.5.0 Preview 1.0 [33024.329.main]. The DefaultAzureCredential worked again with Azure.Identity v1.7.0.

[zhenlan]

I was using Visual Studio, so I would expect VisualStudioCredential or SharedTokenCacheCredential. I don’t know what is actually used when it was working with the older version of the package.