The “challenge” and domain arttributes will be used for DID_auth response or verifible presentation. The “credential_manifest” attribute is used to define the expected display options of the VC in the wallet (outpout_descriptors).
“vp” is a verifiable presentation as a string here.
If the credential manifest does not request any vc, a vp “did auth” is signed and sent by the wallet to confirm key ownership. Example of a vp “did auth” :
verifiable presentation (vp) is a credential bound with nonce if available in the request. This credential includes all the existing profile attributes if wallet holder consents.