Azure AD - Integrate Partner users into AAD who is using Okta

@Skully, your proposed solution of using B2B is the best way to go. To reduce the admin overhead, you can automate using Access packages to certain application. For the terminated users, I would suggest using Access review feature, where if the user is inactive, let's say 30 days, you take away the rights. This will ensure whoever is using keeps the access. Try using direct connect feature if that is applicable in your situation.B2B direct connect overview - Azure AD - Microsoft Entra | Microsoft Docs
For the question on Okta auth flow being used by partner for your tenant's resources/ App when you are using Azure AD for authentication, that's not possible since they are sign-in into your tenant, and can only be authenticated to Azure.