When configuring a new Azure AD Connector in Active Roles Synchronization Service using Auto configuration, the process may fail when selecting Create or update Azure application.
The UI may show an error similar to: "Azure application is not created or updated" or "Could not create or update the Azure application".
In some cases, the Azure application may actually be created in Azure, but the certificate is not properly generated, uploaded, or saved to the local machine certificate store. This prevents the connector configuration from completing successfully.

The following defect ID 695712 has been created to address this issue, and it will be fixed in a feature release version. Please refer to this article for updates or contact support referencing the Product defect ID: 695712.
The following defect ID 695712 has been created to address this issue, and it will be fixed in a feature release version. Please refer to this article for updates or contact support referencing the Product defect ID: 695712.
WORKAROUND:
Important Note
If the environment/server requires a higher version of Az.Accounts, this workaround may not be suitable. In that scenario, a product code change/binding redirection fix will be required.
1. Open PowerShell as Administrator.
2. Check the installed Az.Accounts versions:
Get-Module Az.Accounts -ListAvailable | Select-Object Version, ModuleBase
3. If version 5.0.0 or lower is not installed, install version 5.0.0:
Install-Module Az.Accounts -RequiredVersion 5.0.0 -Force -AllowClobber -Scope AllUsers
4. Remove versions higher than 5.0.0:
Get-ChildItem "C:\Program Files\WindowsPowerShell\Modules\Az.Accounts" -Directory | Where-Object { [version]$_.Name -gt [version]"5.0.0" } | Remove-Item -Recurse -Force
5. Restart the Active Roles Synchronization Service.
6. Retry the Azure AD Connector auto configuration.
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