Jenkins validates API tokens against the local user record, but then asks the security realm for the user's details. Without this allowlist the Entra ID lookup fails for local-only users and the request is rejected. Names listed here are treated as "the realm cannot tell whether this user exists", which lets API-token authentication proceed with the user's last granted authorities.
Leave empty (the default) if all your users exist in Entra ID. Interactive login is never possible for these accounts; deleting a user from Entra ID keeps invalidating their API tokens regardless of this setting.