Azure AD B2C block sign in from external identity providers

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Newly created users coming from an external identity providers will also be created in the directory. They also have a setting called "block sign-in".

It seems that this is not honored in my directories, only for local users. I can sign in with users marked as "blocked".

Additionally, it seems that the default for all of my users currently "block" which is wrong.

Is this working as designed?

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