The most common case has been fixed (bravo!) but there are many - many! - other cases where a user follows a "deep" link to a course resource and is challenged to login.
Other parts of moodle send emails. The glossary highlighting embeds links that may point to must-be-logged-in resources.
But most importantly, other users of moodle send emails or embed links in emails or messages (IM?) that don't go via moodle.
So a mechanism to say "yes, you are allowed to use this moodle but you cannot login here, your IDP is over _there_" is important.
Yes, it is confusing. We can clarify the UI a bit, but beyond that, I'm not sure how we can make it better without getting into a whole lot of trouble.
Moodle networking (MNet)
What is MNET ID provider
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