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ConnectWise Cloud Backup is a multitenant application; customers grant consent for the application to operate in their tenants. We assess that the actor likely abused permissions previously granted by customers to the application, including highly elevated permissions like Directory.ReadWrite.All.
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The credential-addition step has a preventive control: an app management policy can restrict passwordCredentials on applications and service principals, per the Graph docs. It does nothing about consent already granted - which is the way in here - but it closes that backdoor.