Hi there,
The below documentation might help you in a better understanding of the process.
NTLM user authentication https://learn.microsoft.com/en-us/troubleshoot/windows-server/windows-security/ntlm-user-authentication
Migrate application authentication to Azure Active Directory https://learn.microsoft.com/en-us/azure/active-directory/manage-apps/migrate-application-authentication-to-azure-active-directory
NTLM Overview https://learn.microsoft.com/en-us/windows-server/security/kerberos/ntlm-overview
Grant locally-managed partner accounts access to cloud resources using Azure AD B2B collaboration
https://learn.microsoft.com/en-us/azure/active-directory/external-identities/hybrid-on-premises-to-cloud
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