TLS1.3 connection failing with Invalid token on Windows when using .NET application

Question

I am on Windows 11 and had enabled TLS1.3 in Registry. I am using a .NET application with TLS enabled,but while communicating with the server i get the following exception

000003E1 03:10:39.068084   8908.1      ThreadId:1, MS_Source:System.NetMessage: [7468] InitializeSecurityContext(credential = System.Net.SafeFreeCredential_SECURITY, context = 8bb628:10111, targetName = dotnet.com, inFlags = ReplayDetect, SequenceDetect, Confidentiality, AllocateMemory, InitManualCredValidation)
000003E2 03:10:39.068084   8908.1     ------------}  ExternalSourceTracer_MS rc=OK
000003E3 03:10:39.068084   8908.1     ------------{  ExternalSourceTracer_MS
000003E4 03:10:39.068084   8908.1      ThreadId:1, MS_Source:System.NetMessage: [7468] InitializeSecurityContext(In-Buffers count=2, Out-Buffer length=0, returned code=InvalidToken).
000003E5 03:10:39.068084   8908.1     ------------}  ExternalSourceTracer_MS rc=OK
000003E6 03:10:39.092392   8908.1      System.Security.Authentication.AuthenticationException: A call to SSPI failed, see inner exception. ---> System.ComponentModel.Win32Exception: The token supplied to the function is invalid
   --- End of inner exception stack trace ---
   at System.Net.Security.SslState.StartSendAuthResetSignal(ProtocolToken message, AsyncProtocolRequest asyncRequest, Exception exception)
   at System.Net.Security.SslState.CheckCompletionBeforeNextReceive(ProtocolToken message, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartSendBlob(Byte[] incoming, Int32 count, AsyncProtocolRequest asyncRequest, Boolean renegotiation)
   at System.Net.Security.SslState.ProcessReceivedBlob(Byte[] buffer, Int32 count, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReadFrame(Byte[] buffer, Int32 readBytes, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReceiveBlob(Byte[] buffer, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.CheckCompletionBeforeNextReceive(ProtocolToken message, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartSendBlob(Byte[] incoming, Int32 count, AsyncProtocolRequest asyncRequest, Boolean renegotiation)
   at System.Net.Security.SslState.ProcessReceivedBlob(Byte[] buffer, Int32 count, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReadFrame(Byte[] buffer, Int32 readBytes, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReceiveBlob(Byte[] buffer, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.CheckCompletionBeforeNextReceive(ProtocolToken message, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartSendBlob(Byte[] incoming, Int32 count, AsyncProtocolRequest asyncRequest, Boolean renegotiation)
   at System.Net.Security.SslState.ProcessReceivedBlob(Byte[] buffer, Int32 count, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReadFrame(Byte[] buffer, Int32 readBytes, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReceiveBlob(Byte[] buffer, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.CheckCompletionBeforeNextReceive(ProtocolToken message, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartSendBlob(Byte[] incoming, Int32 count, AsyncProtocolRequest asyncRequest, Boolean renegotiation)
   at System.Net.Security.SslState.ForceAuthentication(Boolean receiveFirst, Byte[] buffer, AsyncProtocolRequest asyncRequest, Boolean renegotiation)
   at System.Net.Security.SslState.ProcessAuthentication(LazyAsyncResult lazyResult)
   at System.Net.Security.SslStream.AuthenticateAsClient(String targetHost, X509CertificateCollection clientCertificates, SslProtocols enabledSslProtocols, Boolean checkCertificateRevocation)

The same works fine with TSL1.2.