Was creating a new Function App today and noticed this.
Nice work Microsoft! I don’t know when it was released (the last time I created a Function App was in April I think, so sometime in the last month or two I’d presume).
Selecting the Managed Identity option let you choose the one to use.
In my case it said I didn’t have the rights to create one (must be down to PIM and the role not being enabled).
But this is nice! No more doing all these manual steps afterwards.
Next step? Also offer to create a Key Vault and put all the Function App related secrets in there if one goes with that option. Please! ☺️