Party B picks one and uses that to compute future values that are sent back to party A _but without telling party A which of the two values they picked_.
In this example I'm hand-wavey because the production math is complicated and confusing - I took a vastly simplified approach that still works functionally for the demonstration without fully implementing the OT protocol.
> what happens if an owner drops out or you want to introduce a new one? what happens if you want to change the quorum?
In either of those scenarios, assuming you still have quorum, you can regenerate keyshares for the new group for the same public key (and underlying yet unknown private key) by re-running the ceremony with the new participants. Production implementations of the protocol fully flesh this out.
> traditional authentication ...
I wouldn't use TSS in that setup. Traditional auth + MFA is more than adequate. The better use case would be where you have a group that needs to demonstrate consensus (like governance for a programming language, multiple parties involved in signing an application release, or even an HOA that needs to vote on policies). In all of these, you'd take an M of N approach (rather than the simplified 2 of 2) for achieving quorum.
