I discovered the relevant error message in the first line of the log listed was No basic authentication headers were found.
In my vhost file, I pass headers on the FastCgiExternalServer line, under mod_fastcgi:
FastCgiExternalServer /var/www/clients/client1/web138/cgi-bin/php-fcgi-443-domain.tld -idle-timeout 300 -socket /var/lib/php/modules/7.0/fpm/web138.sock -pass-header Authorization
This was the same method that was used in the past. To correct this error now, I modified the vhost file under mod_proxy_fcgi, right above ProxyPassMatch, adding:
`SetEnvIf Authorization "(.*)" HTTP_AUTHORIZATION=$1`
Desktop client is now able to sync.