I have found one more bit of information about this issue. @Emily Hua-MSFT , I don't know if you have the ability to find and update the internal tickets for these things, but if you do, this might be useful for the engineering team.
This problem of the excel activation not working over RAS seems to only occur if Microsoft is not the IdP for the authentication process.
In other words, if I attempt to use my hotmail account to activate Excel, it DOES show the password box. If I use my actual work account, which uses a different IdP, the password does not show and Excel locks up.
I've also found that this issue occurs when attempting to login/configure OneDrive in this environment - the password box does not show and the tool locks up unless I use an account that uses Microsoft as the IdP.
My RAS vendor says they are "working with Microsoft" on this, but that Microsoft is not being particularly proactive or helpful in terms of providing updates or workarounds to them either. The fact that this issue has had no resolution over several years is troubling.