There seems to be an issue with OS that is causing OS ADAL library to override office ADAL
The current resolution to the Windows bug is to disable the ADAL on WAM integration until the fix is available. Or install a older version of OneDrive client which is resolving the issue.
For OneDrive.exe this means:
Setting:
[HKEY_CURRENT_USER\SOFTWARE\Microsoft\OneDrive]
"EnableADAL"=dword: 2
NOTE: EnableADAL has 3 options:
• EnableADAL=0 - This tells OneDrive to use its built-in OAuth logic, which isn't supported with Conditional Access.
• EnableADAL=1 - This tells OneDrive to use the ADAL library (ADAL.dll) with the default settings (which means using AAD Broker Plugin ADAL on WAM integration on Windows 10).
• EnableADAL=2 (or higher) - This tells OneDrive to use the ADAL library (ADAL.dll) but bypass the AAD Plugin WAM integration (ADAL on WAM) on Windows 10).
For Office Applications this means:
Setting:
[HKEY_CURRENT_USER\Software\Microsoft\Office\16.0\Common\Identity]
"DisableADALatopWAMOverride"=dword:1
Windows 10 update to address the ADAL failures has been released for Windows 10 Version
1709 and is available at the following link.
January 31, 2018—KB4058258 (OS Build 16299.214)
https://support.microsoft.com/en-us/help/4058258
Similar updates for Windows 10 builds
1703 and 1607 are currently planned to release the 3rd week in March.
Please confirm what build of the windows that we are having issues ?