We've recently received reports indicating that Outlook and Hotmail accounts are no longer functioning under the "Exchange" login option.
It's crucial to note that Basic Authentication is disabled for all tenants. You can find more information about this change in the Microsoft article: Deprecation of Basic Authentication in Exchange Online.
Users are advised to use the Hotmail/Outlook login option (IMAP), as outlined in the Microsoft Help Center: Add your Outlook.com account to another mail app or smart device.
For additional insights, you can review the response from one of the volunteer moderators on answers.microsoft.com in this post.
For a possible workaround please contact us at email@example.com