Note: The this won’t affect users who are subject to MFA (Multi Factor Authentication,) so this can be enabled to solve this problem.
On the affected machine, run regedit and navigate to;
HKEY_CURRENT_USER > Software > Microsoft > Office > 16.0 > Common > Identity
Create a new DWORD (32 Bit) Entry
Value: 0 (that’s a Zero)
What does this do?: It disables ‘Modern Authentication’.
Then restart Outlook. (Note: It may re-prompt for a password).