Ok. I now have it working.
I tried it with Safari which is not on that access list. Safari asked me to scan a QR code and the passkey login worked after I did that. So it appears the “Passkeys access for web browsers” list is nothing to do with the issue I reported.
So I went back to Brave and, instead of choosing my phone from the passkeys popup, I chose “Use a different phone or tablet” which also presented me with a QR code to scan. Once scanned, the notification came up on my phone and the passkey procedure worked. I was asked if I would like to avoid scanning the QR code in the future, to which I accepted.
Next time around I just chose my phone from the passkeys list and it worked fine.
So all is good.