Same SQL Always On scenario. Solution: enable Floating IP (direct server return) on the internal load balancer. Does this meet the requirement?

Yes, enabling Floating IP (Direct Server Return) on the internal load balancer is the correct solution for an Azure SQL Always On Availability Group listener. This setting allows the secondary replicas to respond directly to client requests without the traffic having to pass back through the load balancer. This is crucial for SQL Always On listeners because it ensures that all nodes in the availability group can participate in the listener's IP address, even when they are not the primary replica. Without Floating IP, only the primary replica could respond, breaking the listener's functionality during failovers or when secondary replicas are accessed for read-only workloads.