The same issue appeared today in new outlook (outlook.com account, same as used for windows 11 user profile, on 30th of march, 2024, New Zealand timezone).
Reading mails gets Access Denied, then I click login - which is accepted immediately.
The mail contents are displayed, after clicking other mails the issue happens again.
Was able to add new events in calendar though... used outlook.com browser version to send an email.
EDIT: While typing this, I tried the login again, the login dialog displayed another text message this time (I didn't screenshot).
It seems this resolved the issue - for now ...