Resolving the error is quite simple, on the https://github.com/smiley22/S22.Xmpp/blob/master/Core/Sasl/Mechanisms/SaslDigestMd5.cs file, on line 154, we have

string digestUri = "imap/" + fields["realm"];

it should be replaced with

string digestUri = "xmpp/" + fields["realm"];

I can prepare a patch later on

After changing this the issue is solved

diff --git a/Core/Sasl/Mechanisms/SaslDigestMd5.cs b/Core/Sasl/Mechanisms/SaslDigestMd5.cs
index 536aa36..381e823 100644
--- a/Core/Sasl/Mechanisms/SaslDigestMd5.cs
+++ b/Core/Sasl/Mechanisms/SaslDigestMd5.cs
@@ -151,7 +151,7 @@ namespace S22.Xmpp.Core.Sasl.Mechanisms {
// Parse the challenge-string and construct the "response-value" from it.
string decoded = Encoding.ASCII.GetString(challenge);
NameValueCollection fields = ParseDigestChallenge(decoded);

•       string digestUri = "imap/" + fields["realm"];
  

•        string digestUri = "xmpp/" + fields["realm"];
      string responseValue = ComputeDigestResponseValue(fields, Cnonce, digestUri,
          Username, Password);