Can Office Licensing Token process be avoided when a O365 user with E5 License logs in to AVD ?

[MarkF26]

Current Configuration:

- AVD hostpool with O365 ProPlus installed in Sessionhosts

- Windows 10 Enterprise for Virtual Desktops

- Shared Computer Activation Enabled

- Azure AD Synched with on-prem AD 

Issue: 

- When a user logs in for the first time in a sessionhost with AD account credentials, and launches an  office app, he is prompted for "Activate Office" . Why is this necessary, when Office checks to see if the user is licensed already with Office365. I am referring to the following process: 

Overview of shared computer activation for Microsoft 365 Apps - Deploy Office | Microsoft Learn

If your environment is configured to synchronize Office 365 (Azure Active Directory) and local Active Directory (AD) accounts, then the user most likely won't see any prompts. Microsoft 365 Apps should automatically be able to get the necessary information about the user's account in Office 365 

[#2]

you need to enable SSO within AD Connect and you need to have some GPOs in place that sso is working:
https://learn.microsoft.com/en-us/azure/active-directory/hybrid/how-to-connect-sso-quick-start