Custom WebDAV-server, office authentication with Azure AD without MS-OFBA

Question

We are developing a custom WebDAV-server, where the goal is for end-users to be able to store and edit Office-documents.
For authentication, we want to support Azure AD, and have solved this using MS-OFBA.

However, a recent update in Office has made the experience for end-users terrible, the user must first allow MS-OFBA in general, then explicitly allow each WebDAV-server to use MS-OFBA. This is not an acceptable solution for us.

I think the change is this: MC203673 Updated Feature: Restricting form-based authentication in Office apps, where it is stated:
"To help provide additional security coverage, we are changing how form-based authentication in Office applications is handled. Forms-based authentication is a legacy authentication method for Office resources that are not protected by Azure Active Directory (AAD) or Microsoft account (MSA)."

So my question is this: In our WebDAV-server, how can we implement an authentication mechanism that Office supports in our WebDAV-server, without using MS-OFBA? It is obviously possible, since SharePoint Online etc does it.

Answer 1

SharePoint Online is fronted by Azure AD, hence no impact to Office. If you use Azure AD ([B2C])/Microsoft Accounts as your auth mechanism, you shouldn't run into this issue. If you do not use AAD/Microsoft Accounts, then you'll need to contend with the security impact.