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Hi,
Based on my understanding, if your external users are Azure AD B2B guest accounts, the ability to use Email One-Time Passcode (OTP) instead of Microsoft Authenticator is controlled through Microsoft Entra External Identities authentication settings.
If your goal is to keep MFA while avoiding Microsoft Authenticator, consider:
- Verify that Email One-Time Passcode (OTP) is enabled for external collaboration users.
- Review any Conditional Access policies that explicitly require Microsoft Authenticator or Authentication Strength policies.
- If Authentication Strength is enforced, modify the policy to allow other MFA methods or exclude guest users as appropriate.
- Test with a newly invited guest account to confirm the sign-in experience before making broader changes.
As an independent advisor, I would also recommend reviewing your Conditional Access and External Identity configuration carefully, as tenant-wide MFA requirements may override the preferred Email OTP experience.
If the issue persists, please engage a Microsoft Support Engineer to review your tenant's authentication policies and sign-in logs, as the actual authentication method presented to guest users is often determined by multiple Entra ID security settings working together.