Angular:
10.2.0
Firebase:
8.0.1
AngularFire:
6.0.4
Failing test unit, Stackblitz demonstrating the problem
Simple context recreation in a repo since StackBlitz won't help with emulators.
https://github.com/jornetsimon/af-auth-debug
Steps to set up and reproduce
Without useEmulator :

With useEmulator :

When using useEmulator(), the call to retrieve the authState should target the emulator (localhost:9099).
AngularFireAuth.user and AngularFireAuth.user should return the previously authenticated user.
During the sign up process (createUserWithEmailAndPassword() / signInWithEmailLink), the calls point to the emulator.
But that is not the case with authState.
For others looking for a solution in the meantime, a simple Chrome extension to redirect traffic from Google APIs Identity Toolkit to the local emulator looks like the easiest.
Careful when testing outside you dev environment though.
Check out the new USE_EMULATOR DI token in 6.1.0-rc.2, it should have ya covered.
{ provide: USE_EMULATOR, useValue: ['localhost', 9099] }
Most helpful comment
Check out the new
USE_EMULATORDI token in6.1.0-rc.2, it should have ya covered.{ provide: USE_EMULATOR, useValue: ['localhost', 9099] }