I’ve just solved the issue. In order to use Yubikey 5c I need it to be inserted into usb at the beginning of the process (i.e. on the view where user chooses login button), then on 2nd factor view, focus on key input field and touch yubi icon on the yubikey.
I tried that earlier without a success. It was because on dark mode input field on 2nd factor view is not visible (at least to me) and I didn’t know I need to focus inside it.
Anyway, glad that it’s working because I started looking for alternatives (Keeper, 1Password) but I’m still thinking BitWarder is the best.