@cR0w @GossiTheDog I actually don't think this is an intended feature - as in, this email is not what causes the account fallback.

Apparently this local account creation can still be triggered if the account is locked due to too many retries on Microsoft's end, so it can technically be any email that you'll have to sacrifice by spamming it with password attempts.

Either that, or it was a legitimate bypass at some point and is no longer the case in current Windows 11 builds.