Azure AD integration - Redirection during Sign Up

We have integrated an Application A with Auth0.
We have Auth0 Integrated with Azure AD.
We have enabled Azure AD as a connection for this application A in Auth0.
Now, below is what is happening:

User accesses Application A, clicks on “Sign up” ----> gets redirected towards Auth0’s Universal login page ----> this is a sign up page of ULP with a hyperlink of “Log In” separately (if you are already registered in Auth0) -----> User enters their domain email address (same domain that is added in Azure AD and auth0 should do an HRD for this) -------> when User clicks on “Continue” after entering the email address, user is asked for the password on the Auth0 ULP itself, instead of getting redirected.

If user chooses “Log In” on the ULP and enters the same domain email address, user gets redirected to Azure for Authentication.

My understanding is that user should be getting redirected during the sign up as well.

May I know what is the issue here? I have validated the configuration on Auth0 for Azure AD integration as an Identity provider, HRD configs, Domain information and rest is all configured correctly. Same looks good on the Azure side as well.