To add more context on this
The dialog is shown when ASWebAuthenticationSession (or the older SFAuthenticationSession Apple Developer Documentation) is invoked, its an apple enforced popup in order to allow the application the ability to access cookies that are owned by the system shared browser (safari). The goal of this API from apple is to allow identity providers to utilize web based session controls. The only case this prompt will not happen is if you open SFSafariViewController instead, which looks visibly different (looks more like a safari web view instead of a immutable header on top that can be used only to login).
You can learn more about AFWebAuthenticationSession at Apple Developer Documentation in short the purpose of this prompt is to protect user’s privacy. Once Custom Domains is set this will allow you to prompt for your domain, therefore the app will show something like YourApp would like to Access YourApp.com in order to login.