In #628 I proposed a CORS change that turns out not to be the root of the issue. Caffeine-addled diagnosis leads to sloppy thinking, and this change should be reverted. In fact, if left it will cause problems for new installations.
Even with the v2 updates listed in #503 and partially addressed in #614, this is still needed to enable identity services to function with Element Desktop/Web. Testing on multiple clients with a clean config has confirmed this, at least for my installation.