First thing first, you should create a local (non-federated) admin before you change the 2FA settings, just in case.
Log in to Oracle cloud, and from the hamburger menu on the top-left, select "Identity & Security" -> "Federation". Select the provider with which you identify yourself. Most probably you'll see only "OracleIdentityCloudService", so click that. On the details page, click on the "Oracle Identity Cloud Service Console" link.
On the Identity Cloud Service page, select Security -> MFA from the hamburger menu on the top left, then you can select what second factor(s) you would like to configure. Note that the mobile app factors require the Oracle mobile authenticator to be installed. One would think that the "mobile app passcode" would use some standard TOTP, but of course it doesn't. Don't forget to press "Save" when you are done.
In the Security -> Factors menu you can customize your second/factor authentication methods.
When you are done, select "Sign-On policies" from the menu. Most probably there is only one policy, named "Default Sign-On Policy", so click that one. If there are more, select the one you want to enable 2FA for. On the "Sign-on rules" page select the rule you want to change. There should be only one rule, so press the menu button on the right and select "Edit" Clicking on the rule's name does not let you edit the rule, so you have to use the menu.
In the popup window, tick the "Prompt for reauthentication" and the "Prompt for an additional factor" checkboxes. If you want to restrict the usable factors, you can do it here as well. If you aredone, click save.
Log out from the cloud, and try to log in. You should be required to select a second factor from the ones you enabled.
As a side note, if you enabled "Bypass code" as a second factor, it is unusable until you generate a bypass code for yourself. This can be done on the Identity Cloud Service page, where you enabled 2FA, but for the bypass code, you have to select your profile (click top right on your user, then select "My Profile"), then select the "Security" tab, where you can generate one-time bypass codes for yourself.
Yea, this should be simpler.