Does Rancher have mechanism to authenticate with AD and Smart Cards with a PIN?

Don't take my word for it, but I imagine that's unlikely to be there by default auth provider for rke2, given it works at a different level of abstraction. If you actually just mean Rancher rather than Rke2, then yes, there might be some auth providers you can configure with Rancher. For example: https://ranchermanager.docs.rancher.com/how-to-guides/new-user-guides/authentication-permissions-and-global-configuration/configure-openldap

So there is an AD provider in Rancher, but the problem is I’m not sure how it would work with some layer of 2FA (e.g. badges).