Fido2 key and their issues using them on Android
First, do Android support using Fido2 keys on Android?
Yes, it does support both using bluetooth, NFC and USB authentication.
For reference: https://developers.google.com/identity/fido/android/native-apps
But does it mean that it is straight forward to use it in a enterprise environment without hiccups?
No, the support lacks many features that both Windows and iOS has supported for long time.
If I buy a modern Fido2 with OTP support, will it work straight out of the box for using the USB?
No, you need to disable the OTP support first. Here is how you can do that from yubikey manager, this works for Yubikey.

Other vendors might have something similar. But for Fido2 keys without OTP support, it should work out of the box for USB-C, like Google titan. Why this happens, dont know.
Can we use NFC for Entra ID authentication like we can on Windows and iOS?
No. Android does not currently support CTAP2 for NFC, only for USB-C input. CTAP1 (FIDO U2F) supports certificate based authentication, but CTAP supports user verification with PIN and biometrics. Entra ID requires UV (user verification) before accepting login.
As far as I know, there is also support for bluetooth. But I dont have any fido2 keys that support bluetooth yet.

So why does this matter?
With Android you can have shared devices with secure login for multiple users with a single log in for all supported apps, auto log off and many other possibilities.
https://learn.microsoft.com/en-us/entra/identity-platform/msal-shared-devices
Other sources/discussions:
https://www.reddit.com/r/yubikey/comments/1oncuh2/whats_the_point_of_nfc_on_android/
https://www.reddit.com/r/yubikey/comments/13tlzoc/fido2_inconsistent_across_windowsandroid/
https://fidoalliance.org/specifications/