The solution is based on two concepts that you must be familiar with to implement the solution: Service principal and Managed identities.
This article explains in detail how an ISV or any other Power BI Embedded app owner with many customers can use service principal profiles to map and manage each customer's data as part of their Power BI embed for your customers solution.
The full details are described here with only mentioning user-assigned or system-assigned managed identity as an option.
Azure Managed Identities is a service that allows Azure resources to authenticate cloud services without the need for storing credentials in code or configuration files. It does this by providing a unique identity for the resource in Azure Active Directory (Azure AD), which can then be used to authenticate to any service that supports Azure AD authentication. You can read more about managed identities here.
There is a UI issue where the friendly name of the service principal is not displayed once the access pane is closed and re-opened, making it harder to track.
Thanks to Ted Pattison and Yoav Dobrin for the help.
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