I have the same issue. Safari gives me a prompt asking for my FIDO2 PIN. After succesfully entering the PIN another prompt comes up requesting to activate the key. Orion does not offer the first prompt asking for the FIDO2 PIN. This might be the reason Orion doesn't "recognize" the security key.
Steps to reproduce:
Log in to any site where you have set up a hardware key as MFA. The following prompt shows up.

I enter my hardware key and activate it, but nothing happens.
Expected behaviour
Before asking to activate my security Orion should prompt me to enter my FIDO2 PIN.

After entering my PIN Orion should prompt me to activate the key.

Orion, OS version, hardware type, hardware key
Version 0.99.122-beta, Ventura 13.0.1, M1 Pro, YubiKey 5C NFC