Thanks again for checking this out! I figured out what was preventing the iOS testers from installing in our case. At some point, our iOS App Distribution build process changed from producing an ad-hoc distribution archive and was generating an app store distribution one instead. That in turn prevented the testers from being able to download the FAD IPAs to their device (and, they had no separate ability to enable Developer Mode, which I incorrectly believed was the main problem).
Once we corrected the FAD build process to export the archive using ad-hoc distribution, everything worked as advertised. The testers were able to download the archives, and clicking on the archive enabled the option to activate Developer Mode, and once DM was activated the app worked as expected.
Apologies for my confusion, and thanks again for all the guidance here!
-Eli