I'm not on 14.7. Prior stable versions of Sonoma did not exhibit this problem on my Intel-based iMac Pro. Starting with 14.7, I cannot use smart card with Apple software, like Safari, Chrome, VMware, etc.
On the other hand, OpenSC-based software works with smart card fine. And if I load OpenSC PKCS#11 library into Firefox - it accesses the smart card OK too. So, a CryptoTokenKit problem, likely.