MOS SIA end user experience

Good morning,

We have a hybrid Exchange organization with SSO.

Users with cloud mailboxes log into their domain-joined PC but are then prompted to enter their credentials upon starting Outlook 2010.  I understand MOS SIA (Sign-in assistant) is meant to make it a smoother experience.

But what does it look like from the end user's POV?

1. Does it silently pass through their domain credentials to O365 so that another password box does not pop up?
2. Or, does it simply remember their password so that a subsequent login to Outlook will not prompt for a password?

Thank you for any assistance.

Al