Answer is correct: authenticating to cloud resources by using single sign-on (SSO)
After Device1 is registered in the Microsoft Entra tenant contoso.com, it gains several capabilities:
Single Sign-On (SSO): Device1 can use SSO to access cloud resources seamlessly.
Conditional Access: Device1 can be subject to Conditional Access policies, which help secure access to resources based on device compliance.
Mobile Device Management (MDM): If enrolled in MDM (e.g., Microsoft Intune), Device1 can have organization-required configurations enforced, such as password complexity and encryption.
Access to Organizational Resources: Device1 can access resources in the organization based on the Microsoft Entra account.
https://learn.microsoft.com/en-us/entra/identity/devices/concept-device-registration
B should be my answer. A registered user/device can access company data when it meets compliancy and/or getting through ConditionalAccess. There is no SSO with such a registered device.
You can't enforce compliance policies on registered devices, only enrolled devices
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