I don't have an actual answer - but a thought, because i had a very similar query only this morning that I'll be looking at later in the summer.
Can 2 moodle sites be set up in a similar fashion to a Mahoodle link using one as the master institution and the other to have a single sign on based on having already signed into the first (MNet - rather than LTI, as its sharing authentication rather than activities/resources).
My example is needing to give access to an archive site from the live site, preferably without paying for more licences for our external SSO solution . We already have Mahara set up like this, so plan on looking into whether Moodle can be set up the same way.
In my instance I am quite happy with that Primary/Secondary kind of set up, rather than 2 equal peers - I'm not sure if that would apply to you Dave?
For testing plugins I maintain, I have to do that very thing for Moodle 2.7 through 3.5. The relatively easy manual way to do it is to keep a CSV file of the users information. If I want to change passwords or any other item, I make the change in the CSV, then on each site run Site administration > Users > Accounts > Upload users. Just carefully pick through the options for the upload so that whatever changes you made in the CSV file get applied.
Mnet can be set up to link users on two Moodle sites. I believe that moodle.org and moode.org/plugins is (or was) an example of this (same user login works on both systems). One limitation of this is that accounts must be created on one site if they are to be transferable.
Thanks for the confirmation Daniel.
Not sure about the OP but yes for my situation, the users are created on the main site from AD and managed from there through a single sign on process. All I am then looking to achieve (later in the summer) is allowing users, who have already signed on to the main Moodle site, to be able to click a link through to the separate archive site(s) without having to sign on again (and without having to pay additional licences for our SSO service). It does seem MNet is the way to go for that and I know its fairly easy to set up as we already use it for our Moodle - Mahara links.