Changing default authentication type is not preserved across sessions when MySQL server is configured with autocommit off (config options: autocommit=0, init_connect='SET autocommit=0').
I know is not a usual configuration, but the code should control autocommit and not rely on defaults.
It works if you add 'DBexecute('SET autocommit = 1');' to include/db.inc.php in function DBconnect (for MySQL type) but i don't know the implications further down the line (eg. if $DB['TRANSACTIONS'] = 1, for other DB types like DB2 autocommit is set to on)