While using SSO, in order to create a public connection to Oracle Discoverer for Oracle Applications, I suggest creating a service account (user) in EBS and marking that user for LOCAL authentication (instead of SSO).
There may not be many reasons to create a public connection in this scenario, but I did come across one recently and it is not well-documented, so I thought I would share.
Of course, with Oracle BI Discoverer (non-Oracle-Applications), connections are made by database users and creating a public connection doesn’t require any EBS changes.