How can i disable the option of using SMS as a MFA for just some users (those who have a security token) and let other users keep using SMS as MFA? Alternatively, you can use MS authenticator app based sign in as default method as it is supported by all web and modern authentication supported clients. Security key (FIDO2) based sign-in is an optional feature and unless all Microsoft services are compatible with security key based login, it wont makes sense to force it. Eg : Azure AD PowerShell, Login to AzureAD/Office 365 services on IOS or even with Outlook/Teams etc running on windows. You cannot set Security Key as default login option for users because not all Microsoft applications currently supports security Keys based sign-in. How can i set the security key as a default sign in method? ET&S does not provide YubiKeys for faculty and staff.Please check answer of both the queries below :
Available from Yubico directly, or through popular online vendors such as Amazon, Connection, or CDW-G through the USNH UShopNH portal. 
Available in several form factors including USB-A, USB-C, NFC, and Lightning. 
Recommended for all other non-FIPS USNH systems. NOT for use with FIPS systems such as Federal Grants. YubiKey 5 series meet Microsoft’s Modern Authentication hardware requirements. Pressing the top or side button on the YubiKey generates and automatically enters a passcode on MFA prompts. YubiKeys are small USB devices that are inserted into a desktop or laptop computer USB port / Lighting connector. This is why ET&S Strongly recommends you have a secondary method set up for MFA. If you lose or forget your YubiKey PIN, you will have to work with the YubiKey "YubiKey Manager" application to reset your PIN, or work with the YubiKey manufacturer directly - ET&S has no access to assist with lost YubiKey PINs. Remember your YubiKey PIN or it will not work for M365 MFA. The YubiKey PIN is maintained through a desktop app provided by the YubiKey manufacturer called "YubiKey Manager". This is different from SmartAuth MFA which did not require a PIN. Warning: Microsoft may require a PIN when using some models of YubiKey for M365 MFA.
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