Of course you can fork the project and do what you want to. Cool, that you managed to do so.
But there are two possibilities, which I recommend to look at first:
a) you “misconfigured” you CP. After all, this is a common scenario which works at a lot of installations. As already stated: the might be a setting like “send …password” or no “2step”, which would lead to problems with NLA.
b) there is a bug in the privacyIDEA CP - then it would be great, if you actually would open an issue and create a pull request. In the long run this makes more sense, than create a fork that works for you.
But no problem - from a legal or license standpoint you can of course do that!