Windows Hello, I hate to have to say it, but it is not user friendly when a security device doesn't work (even if it did or should). If you had an enterprise or whatever capable Windows, there could be a little more ability, but it is still highly unfriendly.
It might not be fixable. The only fix might be to wait for some Windows update to someday to fix it. The way its made is kind of to not allow users to tamper or work with it since its security and the way into Windows.
However, if the security key works say in a browser with a 2fa website login then Windows Hello is the issue.
If it doesn't work from a browser, then you have an issue with it working and would need to solve that. That would not be a Windows Hello issue directly. You might need to have Dell fix that or buy something else Windows hello allows. As I would expect that to be a physical issue. A security key should just work. If it would randomly fail so easily, its unreliable for security, and shouldn't be used.