Azure AD abolishes its 16 char limit for passwords!
It's about time.
Today, Microsoft announces that they have changed the 16 character limit for Azure AD passwords, allowing you to set a password with up to 256 characters, including spaces. You can see more details on password requirements in their password policy documentation.
I've been reporting this for several years as a problem. It's not over yet, as the change password UI flow doesn't support it yet at https://account.activedirectory.windowsazure.com/ChangePassword.aspx. But according to comments from Microsoft, they are working on it as we speak. Should be fixed soon.