Function app can't be created on VSCode

[lilyjma]

I created a Function app through the Deploy to Function app command. I chose MI as the authentication type. However, the deployment failed and based on the error, the possible reason is the Storage account was created without key based access (because MI was chosen) but it was still being accessed with key -

5:49:09 PM: Successfully created resource group "1031vscodedeploy".
5:49:10 PM: Creating user assigned identity "1031vscodedeploy-identities-9fa0d3"...
5:49:18 PM: Successfully created user assigned identity "1031vscodedeploy-identities-9fa0d3".
5:49:23 PM: Successfully created app service plan "FLEX-1031vscode-deploy-8a60".
5:49:23 PM: Creating storage account "1031vscodedeploy" with sku "Standard_LRS"...
5:49:47 PM: Successfully created storage account "1031vscodedeploy" with sku "Standard_LRS".
5:49:49 PM: Verifying that Application Insights is available for this location...
5:49:56 PM: Successfully created application insights "1031vscodedeploy".
5:49:56 PM: Creating role assignment "Storage Blob Data Contributor" for the storageAccounts resource "1031vscodedeploy"...
5:50:01 PM: Successfully created role assignment "Storage Blob Data Contributor" for the storageAccounts resource "1031vscodedeploy".
5:50:01 PM: Creating function app "1031vscode-deploy"...
**5:50:40 PM: Failed to create function app "1031vscode-deploy".
5:50:40 PM: Error: Key based authentication is not permitted on this storage account.**
RequestId:6f44e038-501e-0038-4eb0-4a4079000000

The Function app was still created but can't be deployed to because of the attempt to access storage through key.

[lilyjma]

FYI @nturinski

[nturinski]

NOTE: It works if I use the Microsoft tenant Doesn't work if I use my MSDN account (bxscience.edu) which is more like what a customer's environment would be