It frustrated everyone.
Since we've implemented the stepped process (and made other changes) complaints have all but disappeared, and the number of failed sign in attempts has been significantly reduced, successful logins has increased slightly, and overall login attempts dropped.
It's not perfect, but all indicators are it's better than a screen full of options - it allows us to guide users to the correct action.
Sure, it can still be annoying, but less so than what it was.