Outlook 2016 doesn't accept password or app password

For me with that solution all work fine at today.

Nothing better than give access to a chinese (or any other, really) software to our email account

Here the official response from MS dated Feb.2: https://support.microsoft.com/en-us/office/outlook-and-other-apps-are-unable-to-connect-to-outlook-com-f4202ebf-89c6-4a8a-bec3-3d60cf7deaef

STATUS: MITIGATING

The Outlook.com Team implemented service changes on January 31, 2024 to address the connection issues with unexpected authentication prompts. Although this addressed a lot of the issues we are still seeing reports of password prompts. The Outlook.com Team continues to address the issues as we work through the reports and feedback. We will continue to work this issue until the issue is resolved. 

For Outlook 2013 and Outlook 2016, if you are still seeing authentication prompts, please ensure you've enabled two step verification and create an app password. Use the app password in place of your normal password when Outlook prompts for authentication. For more information, see Using app passwords with apps that don't support two-step verification. 

Well, I can never connect to Hotmail on an Exchange Connection. Switching to IMAP/SMTP, I can only connect with a regular password, never with an app password as requested.

On Outlook.com, I can connect to the Exchanger Server, but with a regular password only, never with an App Password.

Switching between various options is very time-consuming. MS QC starts to look very similar to the end of the Ballmer's era. Last 2 months Windows updates started to be buggy, and now this, especially the time it takes to resolve... The MS link above displayed "STATUS: RESOLVED" yesterday!

I will stop making changes and wait for the problem to be resolved, not patched.

Most likely non-app passwords will not work at all going forward, this seems to be related to them locking that down more. I'd get it working with an app password (may have to disconnect and reconnect your network several times to get it to take) then just leave it with that so when it is fixed, you're all set. In the meantime, bouncing the network 1 or 2 times has been fixing it for me. I'm using an app password on gmail for android connecting via activesync to outlook.com.

My outlook 365 on my two PCs (using exchange to outlook.com) has had no issue this whole time, with 2FA enabled that uses Oauth2 which has not had any issues.

That one is definitely coincidence, the stuff on that page is unrelated to this issue, it will go down again. I can stay up for a whole day but when I switch networks it will have an issue until I bounce the network connection a couple times.