Resolution, since this one has a clean answer: the fix went into the 2026.8.0 beta and shipped in stable 2026.8.0. Update the core and set the integration up again.
While it was unfixed there was a community custom component doing the new login flow. It worked for a lot of people and it is now unnecessary. If you installed it, take it out before you update, because a custom component with the same domain shadows the built in one and you will be running the old workaround on a fixed core without realising.