PowerBI Embedded (App Owns Data) Creating embed token with effective identity fails

I have avery basic Azure Analysis Services data-model, and 0365 PBI Pro license. I;m able to use my 0365 id in PBI desktop and connect to the AAS datamodel and create a report with live-connect option, and even publish to PBI Service. Though I always get an error when i publish that i dont have permissions to do so, the report is published along with the dataset, and the dataset i'm later able to set the credentials to connect to the AAS with oauth2 using my 0365 id. This id is also in administrators role of the AAS.

Within PBI Service, i'm able to view and refresh the report without any issue and even the datasets schedules refresh's work correctly.

Problem when embedding the report in app-owns data sample:

If i set the username to "service-principal-ibj-id" the embed token generation goe through fine. Any other username like my 0365 id it fails saying "requries effective identity username to be identical to the caller's principal name". But at the last point when the report is loading data, it fails with error "Unable to connect to the data model