Outlook 2016 doesn't accept password or app password

I am seeing the same issue with Office 365 version of Outlook. I added one of my test account (on Hotmail), and still get the authentication prompt, though less frequently as the older classic Outlook desktop version. Therefore, the issue is not resolved as MS suggested by going to Outlook 2021 or later. However, adding the same Hotmail account to Outlook for Android doesn't get those prompts.

I hate Outlook for Android but since its accessing my work data, which is also on Microsoft infrastructure, I am less concerned about data privacy. Outlook for Android has anti-competitor/anti-trust worthy behaviors. Proper syntax Google Meet URL in calendar invites are not clickable but Teams' is clickable. All my coworkers that attend Google Meet meeting have the same issue. Amazon Chime meeting URL is also not clickable. I ended up forwarding those Google Meet and Amazon Chime meeting invites to my Google account which then showed up in Google calendar and they magically become clickable and launch those meeting apps accordingly.

I am really disgusted with Microsoft's approach these days. As pro-tech as I am, the government needs to step in.

In Outlook click File, Account Settings, Account Settings. Make sure the account shows as Type = Microsoft Exchange. If it is not, you can try removing it and add it back as Exchange or create a new Outlook Profile, Create an Outlook profile - Microsoft Support. Now that Basic Auth is being deprecated Outlook does not support adding Outlook.com accounts as POP/IMAP.

It's showing as Microsoft Exchange already. On that screen you showed, I have two accounts, one is my work and the other one is the test Hotmail. My work email doesn't give me prompt for authentication but the Hotmail one does. Outlook version is 2407.

EnableADAL key doesn't exit in my registry. I don't know the default state of this. I have added it and set to 1, no difference.

I have a coworker doing the same for his outlook.com personal account and see the same issue. The authentication prompt is not as frequent as before but it definitely pops. In fact, that dialog has a "stay on top" behavior, so I have seen his pop during screen-shared Teams meeting.

POP3/IMAP is not longer used in Outlook desktop for hotmail/live/msn/outlook.com mail is a good thing. Exchange or EAS should be used to sync contacts and calendar as well. Those are syncing, so that's another indication I am on Exchange with this hotmail account.

Is the auth prompt the Windows Security prompt or like this one below?

If you click File, Office Account, under User Information, make sure you are signed in there with the account you got the subscription and no errors there.

Check the Connection Status Dialog if the Status shows any connections not Established when the auth prompt shows up. To see the Connection Status Dialog, locate the Outlook icon in the System Tray, press the Ctrl key, right click Outlook icon and click Connection Status.

In case there is some issue with the Outlook Profile, use the steps here to create a new one, Create an Outlook profile - Microsoft Support. You can keep the old profile or delete it later once you know everything is showing correctly in the new profile.

If the issue persists check if you have the option Help, Contact Support in Outlook Subscription and open a ticket from there.