Hello, I made that change. The 401 (Unauthorized) is being sent by Nextcloud so that's where the problem is, the change in MDL-70282 doesn't alter that. But it does mean that if you enable debugging in Moodle (Debug messages: DEVELOPER, Display debug messages: Yes) you should then see any error messages that Nextcloud is sending which may help resolve the issue.
Authentication
Connection Error between NextCloud and Moodle
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