Outlook 2016 doesn't accept password or app password

It's US Holiday today (Monday, 2/19), so probably not a lot of MS folks are working. I am still having the issue on all my devices throughout the day but it seems to come in bursts. Once it "settles down", it would go quiet/normal for some time before the next round of this. I wish MS would be more transparent about the cause or what they've identified so far.

I would again argue you are disconnected from reality. I happen to be in a senior role at my company. Talking to my peers, most people are worried about losing long-term customers, acquisition or re-acquisition cost of long-term customers is very high. One can argue that are plenty of competitions, long term or legacy customers' "laziness" is an important element that keep those customers from defecting. The "laziness" comes from risk-mitigation and don't want to fix what's not broken. Microsoft just open a huge door. We are literally talking to the G company about switching over - that idea wasn't even possible just a few years ago. Why? Several IT and exec leads are having issue with their own MS mail and it also triggered feedback from users of their own experiences - personal experience does impact business decisions, period.

I really don't understand your motivations here. Many folks including me have said from Day 1 that we have MFA enabled on the account and client, yet you are always on that wagon blaming people for not having MFA enabled and not using OAuth, just scroll back and read your own comments. From the debug logs, MS servers declined OAuth so the client used the legacy method. There isn't much we, as users, can do from the client side. And you know what's sad about this? I tried all supported protocols to fetch/sync using Outlook desktop to/from Gmail and it works without a single issue. Regardless how little senior product leadership cares, at some point, they need to come to grip with reality.

You are right, the issue impacts the latest M365 version of Outlook. I added my personal Hotmail to my work Outlook, which is M365 with latest updates from the stable channel and it has this exact issue...over and over and over again. It was so bad, I removed my account from my work Outlook after a few hours. The password prompt has some type of "always on top" attribute and draws over all other screen elements. It also takes away cursor/pointer focus, so it's incredibly disruptive to normal workflow, so I had to remove it.

It almost like promo event for subscription-based Microsoft 365.

Very bad one. Maybe they are routing for MS Edge/Web access, but i have issue with web Outlook too. Some links don't work.

Jokes aside i feel your pain and frustration. I can't be productive without outlook and sinking it down is not the smart move on MS side. There is not much of journalism outcry on the subject though. Which surprises me.

I have work provided Office 365 pro and there outlook has it's own unique issues which bug me as well. Again, one of the most needed tools in office is not up to the task.

Another authentication error. 2 outlook.com accounts. Immediately took the sign-on credentials, but issue obviously not resolved. This was on 9Folders. Also, server authentication error on 3 outlook accounts on Thunderbird just now. Again, reset and retrieved and all worked. Nonetheless, the consistent failure of login credentials continues on MS servers.