We're running into the same issue with the latest beta. After our Security Agent plugin is installed, any authorisation attempt that involves one of our plugin's mechanisms fails abruptly. Doesn't seem to matter if it's in loginwindow, in an authentication dialog, or when a right is requested in our app code.
I'm not sure the log message mentioned above "privileged (0)" is necessarily, since it also shows up when running the same plugin on Catalina where the issue doesn't reproduce.
In case this helps in any way, going over system logs in the console.app for the com.apple.Authorization subsystem, this is what it looks like on Catalina where everything works:
debug 17:45:04.234527+0300 authorizationhost XPC connection isAccepting=1 pid=165
debug 17:45:04.234565+0300 authorizationhost XPC connection init pid=165
debug 17:45:04.234658+0300 authorizationhost Request: caller is trusted: 1
debug 17:45:04.234776+0300 authorizationhost Processing request: pid=165 AuthPlugin:auth
debug 17:45:04.234961+0300 authorizationhost No plugin at path: /System/Library/CoreServices/SecurityAgentPlugins/AuthPlugin.bundle
debug 17:45:04.283174+0300 authorizationhost Plugin AuthPlugin is privileged: 0
info 17:45:04.283191+0300 authorizationhost Using helper for unprivileged plugin AuthPlugin:auth
info 17:45:04.294703+0300 authorizationhosthelper AuthorizationHost helper start
debug 17:45:04.295203+0300 authorizationhosthelper Main dispatch_semaphore_wait
debug 17:45:04.295301+0300 authorizationhosthelper XPC connection isAccepting=1 pid=60413
debug 17:45:04.295351+0300 authorizationhosthelper XPC connection init pid=60413
When running on the latest macOS Big Sur beta (20A5343i) this is what we're seeing:
debug 17:45:02.452914+0300 authorizationhost XPC connection isAccepting=1 pid=154
debug 17:45:02.452954+0300 authorizationhost XPC connection init pid=154
debug 17:45:02.453046+0300 authorizationhost Request: caller is trusted: 1
debug 17:45:02.453119+0300 authorizationhost Processing request: pid=154 AuthPlugin:auth
debug 17:45:02.453255+0300 authorizationhost No plugin at path: /System/Library/CoreServices/SecurityAgentPlugins/AuthPlugin.bundle
debug 17:45:02.476737+0300 authorizationhost Plugin AuthPlugin is privileged: 0
info 17:45:02.476782+0300 authorizationhost Using helper for unprivileged plugin AuthPlugin:auth
debug 17:45:02.476857+0300 authorizationhost No plugin at path: /System/Library/CoreServices/SecurityAgentPlugins/AuthPlugin.bundle
debug 17:45:02.479788+0300 authd agent: finalizing
error 17:45:02.479827+0300 authd Error creating mechanism agent (engine 433)
debug 17:45:02.479867+0300 authd engine 433: evaluate mechanisms result -60008
error 17:45:02.479895+0300 authd Evaluate cancelled or failed -60008 (engine 433)
error 17:45:02.479918+0300 authd Evaluate returned -60008, returning errAuthorizationInternal (engine 433)
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I've also opened a bug report, FB8351241 on Feedback Assistant.