The Bluesky dev team pushed a change this week to reserve your https://bsky.social handle when swapping to a custom domain handle, but it isn't retroactive.

Can confirm that if you manually made a "squatting" account and go through the flow that @emilyliu.me describes here, it'll re-associate correctly!
Reposted from Emily Liu
your account won't be affected. but if you'd rather reserve the username w/ your main acc, a workaround:
- delete the bsky.social account
- update your real account to the bsky.social username now that it's freed up
- update back to your domain
- your bsky.social username will be reserved

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