Using classic Outlook for Windows in business environments
Now I have made an absolute fool of myself,
Really wish you would stop saying that - going to give me a complex every time I write something that isn't exactly right 😊
#1 - You are correct in that the account configured using IMAP would be the reason for getting that message
#2 - None of this has anything to do with anything when you access the account via webmail (using a browser - https://outlook.live.com/owa/)
#3 - While I only use the Outlook Mobile app on my iPad 0 the server settings on your phone for the account are correct. Don't know why it would have been configured as an IMAP account if you configured it by entering the email address / password for the account. There would be no particular reason to change your email client on the phone but if you did want to explore the Outlook mobile app, just need to download it from the Apple Store
Overall, I'd say you are in very good shape from everything you've written. To stress and repeat what I've already said before, do yourself a big favor and stay out of the weeds of techno mumbo-jumbo, life will be so much more pleasant <g>