As of today (May 2022), Windows 11 doesn't use an external camera, configured for Windows Hello, when the laptop lid is closed. I recently bought the Logitech Brio 4K webcam, which has the IR camera compatible with Hello and wanted to use it when sitting at my desk with my Surface Laptop aside and closed.

After some internet searching it became clear that this is a long-existing problem (or maybe a feature) and people have figured out the solution:

Open Windows Registry, go to Computer\HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Power and change the LidNotifyReliable value to 0.

There's no UI alternative to this.

Now the USB webcam can be correctly used to sign in to Windows. Great.

Until... not. My laptop is a company managed device and this setting got reverted to 1 only minutes after I made the change manually. Thankfully, there are people smarter than me who figured out a way to deal with this as well.

The last post (at the time of writing) in this forum thread is from November 18, 2021. A user called clguida-6951 posted a method to revert this setting every time Intune applies global settings, using the Task Scheduler. It goes like this:

Create a BAT file and put the following into it:

reg add "HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Power" /t REG_DWORD /v "LidNotifyReliable" /d 0x00000000 /f

Save it somewhere accessible.

Go to Task Scheduler and then open: Task Scheduler Library > Microsoft > Windows > EnterpriseMgmt > [someguid].

There should be bunch of tasks configured there. Look for Schedule #3 created by enrollment client which calls the deviceenroller.exe and is repeated every 8 hours indefinitely.

Edit this task (double-click).

Go to Actions.

Click New....

Leave the action as Start a program and browse to your BAT script file.

Save and done.