If you make progress on this please post back. I'm being asked to remove this setting because of an issue a specific group is having.

After some more testing, just removing the DisableOneAuth registry entry makes everything work. Here is what they are saying "Regarding your question about what may have changed based on the evidence collected so far the most likely explanation is that the registry keys previously used to force or influence legacy authentication behavior such as DisableOneAuth, DisableAADWAM, and related Office identity settings are now interfering with the current Microsoft 365 modern authentication flow. These settings were previously helpful in your Windows Server 2025 Citrix VDA environment but they now appear to prevent the modern authentication stack from completing silent sign-in as expected. Microsoft 365 authentication components continue to evolve through Office, Windows, Microsoft Entra ID, Web Account Manager (WAM), and OneAuth updates. Because of that it is possible that a platform update, Office update, Windows Server 2025 update, or authentication service improvement has made the previous registry-based workaround unnecessary in the current environment. In the current state, removing those legacy authentication overrides allows Outlook to use the standard modern authentication flow successfully." I confirmed, just removing the "DisableOneAuth' makes everything work again. However, they are suggesting i remove all the other auth reg keys which i had implemented. Which i have confirmed still works. Over the next week or so i'm going to slowly stairstep the removal of the keys in production and confirm all is well still, aka no prompts.

They really want you to delete EnableADAL=1? IIRC, that tells O365 to use Modern Auth

That's the only value we're currently using