`Failed to connect to extension` when using bicep local-deploy with ACR

[johnlokerse]

Bicep version
Bicep CLI version 0.38.33 (6bb5d5f)

Describe the bug
Unable to deploy using extensions from an Azure Container Registry (ACR). After running bicep local-deploy main.bicepparam it throws the following error:

The ACR has anonymousPullEnabled enabled (true).

To Reproduce
Steps to reproduce the behavior:

1. Use bicepconfig:

{
  "experimentalFeaturesEnabled": {
    "localDeploy": true
  },
  "extensions": {
    "azuredevops": "br:azuredevopsbicep.azurecr.io/extensions/azuredevops:0.1.49" // ACR
    // "azuredevops": "../src/bin/azure-devops-extension" // local
  },
  "implicitExtensions": []
}

2. Use main.bicep

targetScope = 'local'
extension azuredevops

resource project 'AzureDevOpsProject' = {
  name: 'hello-world'
  organization: 'Contoso'
  description: 'Created via Bicep'
  visibility: 'Private'
  processName: 'Agile'
  sourceControlType: 'Git'
}

3. Use main.bicepparam

using 'main.bicep'

4. Use command:

bicep local-deploy main.bicepparam

5. Output: error

[riosengineer]

Also seeing this exact error in my local deploy