I am running the Hello-World-Tab-With-Backend example from TeamsFx. As expected when debugging it launches the Front end and back end services but I noticed that its also launching an Auth service (see image below). Can someone help me understand what the Auth service is doing? Does this also need to be deployed when I deploy my app to production? The README does not provide any information on this.
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Simple Auth (Auth Service you motioned) is a backend service helping Teams tab app access first/third party services from client side. TeamsFx SDK calls the Simple Auth Service to get Access Token in Tab apps. You can find the source code and ReadMe of Simple Auth here.
When local debugging, toolkit will launch a local session to host the Simple Auth Service.
When provisioning from Teams Toolkit, toolkit will provision a Web app on Azure and deploy the source code, thus you don't need to care about the deploying.

Bowen Song
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Just a followup comment... why doesn't the client simply request the token directly form the Microsoft auth endpoint via authorization code flow with pkce? Seems very unnecessary to host the server side code with all these .NET dependencies jsut for that. – Anthony Phan Feb 21 '22 at 05:20
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Auth Code with PKCE is now supported in latest TeamsFx extension and CLI and Simple Auth Server will soon be deprecated. Please have a try and feel free to leave your comment. – Bowen Song Feb 22 '22 at 06:04