Not true. Work at an MSP that has hundreds of Microsoft accounts in our password managers with TOTP. We even migrated password managers and had no issues with TOTP.
That said, we are moving away from shared admin accounts and we will have delegated access enabled with JIT for better security soon.
When you start the MFA registration process for a Microsoft account and select the Authenticator as the method there is a link at the bottom of the page about using a different app. Sure it will only generate a rotating code instead of the “easier” method of just entering a 2 digit number when prompted on the phone, but entering 6 numbers isn’t that much more difficult than 2.