In other words, the algorithm has to be implemented as well on the server side, so the signature could be validated, otherwise it will be rejected. I do not know any FIDO2 compliant server implementation, which would support curve25519. In the linked documentation the identificators for known algorithms are listed.
Edit: It does not mean it is impossible to support it, but the API (ids, algorithms) has to be common between server (webservice) and client (device/browser) to make it work.