They used Outlook Web App - runs the Exchange Server codebase btw - to craft tokens to bypass auth.
There's some clever wording in blog around only impacting OWA. OWA is a part of Microsoft 365 and Exchange Online.
The problem was discovered by the US Government and reported to Microsoft. https://edition.cnn.com/2023/07/12/politics/china-based-hackers-us-government-email-intl-hnk/index.html
This one looks like a huge mistake, a consumer MSA key (managed end to end by Microsoft - there's no external logs) was able to forge any Azure AD key.
It's only become public it appears as the US Government told Microsoft, which forces public disclosure.