This also works fine on my iPhone in the native Mail app. I can still use the Outlook app but it will constantlyīe asking for the password. I can also log into the Apple Mail app with my Office365 work email. I can log into OWA (Outlook Web App) just fine.
I've had the admin change my password 3 times just to make sure the password is correct. This is when running macOS 10.11 or macOS 10.12.