I've looked at this in some detail. The noauth option certainly is a work
around. The man page says:

       The default behaviour of pppd is to allow  an  unauthenti­
       cated  peer  to  use a given IP address only if the system
       does not already have a route to  that  IP  address.   For
       example, a system with a permanent connection to the wider
       internet will normally have a default route, and thus  all
       peers will have to authenticate themselves in order to set
       up a connection.  On such a system, the auth option is the
       default.   On  the other hand, a system where the PPP link
       is the only connection to the internet will  not  normally
       have  a  default  route,  so  the peer will be able to use
       almost any IP address without authenticating itself.

I ceratinly do not have a default route (except as established by pppd
its self) and yet the default behaviour now seems to be to require
authorization. If this is not a pppd bug, it is a documentation bug.

Ian