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I used to work for them a little while ago, but, honestly, don't remember enough to help you. If you haven't already, I would reach out to them. Their services team are really good and can probably help figure it out.

I am not sure what type of support we got with them in this place. I have been told when there is a imprivata issues or they need apps re profiling they have to get a imprivata consultant in each time

I can see them charging you consulting for profiling a new app, but if this was working and it stopped, it could be argued that it is not a profiling issue, but a product issue. I'd make the argument and see what they say....

I would check the App Profile(s) and make sure no Changes, in fact, have happened on your side... Then I'd open a Case with MS regarding the M365 service and ask them about any Changes... They're going to say they didn't make any, but it's worth looking into

My last place a gigantic hospital had an SLA/kpi agreement with them to fix things, but it's important to report the bugs asap!

I've deployed it on non-persistent VDI, but for a different use case than what you're using for. Have you checked the backend software (if deployed) to make sure none of the linking changed, or needs to be updated? I'm assuming the on-prem imprivata platform has a connector to Azure/ADFS which is where your problem may lay.