Answer
Check the platform type declared for the Enterprise Explorer client's Redirect URI in the Azure AD app registration — if it's declared as a 'Web' platform type, that's the wrong type and causes exactly this kind of authentication failure. It needs to be declared as a 'Mobile and Desktop Applications' platform type, what Azure AD documentation also refers to as a 'Public Client', instead, since Enterprise Explorer authenticates as a public/native client rather than a confidential web application — IFS's own documentation on this isn't entirely clear about which specific platform type is required, which is why this is easy to get wrong on first setup.