I've setup a new tenant using Microsoft 365 licences. This is a solution for a customer under the new Modern working platform.
I have enabled the password reset option as per the below:
However, when the users and I'm talking about ALL users login for the first time, they are prompted to provide more information. So I click ok as that's what I'm expecting. HOWEVER, the user is then asked to download the MFA app and setup multi-factor authentication. They don't have the option to choose a mobile phone or configure their security questions - See below: