I personally find it unfortunate that the decision was for a 404, but technically the fact that the endpoint returns a 404 can be mostly ignore. The 404 means that for the particular tenant configuration and authentication request being performed that endpoint is not relevant so the server issues that response.
However, it should have no functional impact; if you’re experiencing a problem it probably will not be related to that so I would not treat that 404 as the smoking gun.
In addition, the setting you mention will only be available in older tenants which had access to a previous mode of SSO. For newer tenants seamless SSO is the default and already enabled, hence the lack of the setting.