Using classic Outlook for Windows in business environments
Not IMAP or POP3 because I want to sync email and calendar. 2FA/MFA enabled on the accounts. I used auto discovery to add the account and I see the auto discovery process created an account as EAS account. I get the initial OAuth popped authentication window, via browser, and answered. Setup is complete, and it actually started to build .OST again... and minutes or hours later, bam, authentication prompt. I also tried setup manually and directly point the server address to eas.outlook.com, and will eventually lead to the same behavior and issue.
I am not sure if you have read all the comments here. Multiple people have posted about similar experiences.
I read all of yours and Gabriel's comments, which is saying the issue is caused by people using Basic Auth and because MS is getting brute-force attacked, you have an algo to block authentication attempts if it senses the attempts resemble attack characteristics. I honestly don't believe you've gotten to the root cause of the issue.
Honestly, this issue exposes problems within MS. You have articles suggesting OAuth was not enabled by default on older Outlook versions, but can be enabled by regkeys, but turns out those are not true by your own account, "...after reviewing the code..." so quite frankly, many of us don't know what to believe or how deep to cast our doubts.