Configuration: OS:Kubuntu 20.04 LTS, Yubikey 5 with PIV, sssd version: 2.2.3-3, testing in terminal session without graphic interface to exclude problems from graphic interface
In case when OTP is disabled and  yubikey inserted, in login process I get correct prompt for smartcard pin.
But when OTP is configured in IPA and yubikey inserted, instead getting prompt for smart card pin I get prompt for first factor and second factor.
In /etc/sssd/sssd.conf [pam] section I have enabled pam_cert_auth. I attatch 2 logs from sssd, one with enabled and one with disabled otp.
When I configured second computer the same way few weeks ago, everything works okey, but now I have to disable otp to make smartcard work correctly
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#
# /etc/pam.d/common-auth - authentication settings common to all services
#
# This file is included from other service-specific PAM config files,
# and should contain a list of the authentication modules that define
# the central authentication scheme for use on the system
# (e.g., /etc/shadow, LDAP, Kerberos, etc.).  The default is to use the
# traditional Unix authentication mechanisms.
#
# As of pam 1.0.1-6, this file is managed by pam-auth-update by default.
# To take advantage of this, it is recommended that you configure any
# local modules either before or after the default block, and use
# pam-auth-update to manage selection of other modules.  See
# pam-auth-update(8) for details.
# here are the per-package modules (the "Primary" block)
auth    [default=1 success=ok]          pam_localuser.so
auth [success=2 default=ignore] pam_unix.so nullok_secure
#auth [success=1 default=ignore] pam_sss.so use_first_pass
auth    sufficient                      pam_sss.so forward_pass prompt_always # here's the fallback if no module succeeds
auth    requisite                       pam_deny.so
# prime the stack with a positive return value if there isn't one already;
# this avoids us returning an error just because nothing sets a success code
# since the modules above will each just jump around
auth    required                        pam_permit.so
# and here are more per-package modules (the "Additional" block)
auth    optional                        pam_cap.so
# end of pam-auth-update config
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Jan Ufnalski