According to your description, you want to allow your user to select the correct assignee when manually entering the assignees name.

We can get the REST API which is used in the Azure DevOps UI by checking the network trace in Developer tools of Microsoft Edge.

For example, in the following screenshot, I searched the keyword “test”, and it will return the users contain the word.

Now, we get the Request URL: https://dev.azure.com/{orgname}/_apis/IdentityPicker/Identities and the Request payload:

{
    "query": "test",
    "identityTypes": [
        "user",
        "servicePrincipal"
    ],
    "operationScopes": [
        "ims",
        "source"
    ],
    "options": {
        "MinResults": 5,
        "MaxResults": 40
    },
    "properties": [
        "DisplayName",
        "IsMru",
        "ScopeName",
        "SamAccountName",
        "Active",
        "SubjectDescriptor",
        "Department",
        "JobTitle",
        "Mail",
        "MailNickname",
        "PhysicalDeliveryOfficeName",
        "SignInAddress",
        "Surname",
        "Guest",
        "TelephoneNumber",
        "Manager",
        "Description"
    ]
}

Here is the sample PowerShell script to call the API for your reference:

# Replace with your actual value
$organization = ""
$searchkeyword = "test"
$personalAccessToken = ""

# Create the request body
$requestBody = @"
{
    "query": $searchkeyword,
    "identityTypes": [
        "user",
        "servicePrincipal"
    ],
    "operationScopes": [
        "ims",
        "source"
    ],
    "options": {
        "MinResults": 5,
        "MaxResults": 40
    },
    "properties": [
        "DisplayName",
        "IsMru",
        "ScopeName",
        "SamAccountName",
        "Active",
        "SubjectDescriptor",
        "Department",
        "JobTitle",
        "Mail",
        "MailNickname",
        "PhysicalDeliveryOfficeName",
        "SignInAddress",
        "Surname",
        "Guest",
        "TelephoneNumber",
        "Manager",
        "Description"
    ]
}
"@

# Define the API URL
$url = "https://dev.azure.com/$organization/_apis/IdentityPicker/Identities?api-version=5.0-preview.1"

# Create the headers
$headers = @{
    "Content-Type" = "application/json"
    "Authorization" = "Basic " + [Convert]::ToBase64String([Text.Encoding]::ASCII.GetBytes(":$personalAccessToken"))
}

# Make the POST request
$response = Invoke-WebRequest -Uri $url -Method Post -Headers $headers -Body $requestBody

$jsonResponse = $response.Content | ConvertFrom-Json

# Output the formatted JSON response
$jsonResponse | ConvertTo-Json -Depth 10

Test result:

Note:

Since this API is not documented in the official documentation, the required access scope is not determined. Therefore, currently only a personal access token with full access scope can call this API.