Thanks so much for your help, 

I think this answers everything but in case it helps to summarize

1. Will saw this because email/pass login was not yet disabled - it is now disabled so users only have SSO. Mary was registered already, and I assume the sender of the email was, which explains why they were not prompted with the same screen
2. Yes, password prompt is now removed!
3. If they go with EntraID integration then yes, they can automatically add userbase w/o registration. Otherwise, it would be the usual registration process of adding users and sending the email