I’ve managed to find the problem.
So the activation links were being sent as normal but when the user clicked the link they were being sent to the home screen. This was due too a plugin “404 Redirect to Homepage” I’m not sure what the work around is yet other than deactivating it. the register process is now working.
Ahh it says “Check your email for the confirmation link” so the problem must be that the activation link does not work. not that that passwords are incorrect.