Rewrite is enabled, I have installed 1.16 and able to get it working fine with basic authentication
This has nothing to do with URL Rewriting. Basic Auth does not use anything that requires URL Rewriting.
What I mean about changes RC3 vs RC2 is that some people got it working, which posted here might be using RC2 version
Nothing that should affect that has changed. We only made things editable and provided better defaults.
Cheers.