This behavior (redirect instead of asking user/passwd for remote URL) is not a problem but how Apache handles this type situation. Litespeed just follows Apache (drop-in replacement). You should install Apache and request an authoritative answer from Apache as why they decide to do that.
You should use local document for 401 to let web server pop up user/password as Apache document suggests.
Last edited by webizen; 05-30-2012 at 12:13 PM..