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UPDATE: IT IS WORKING!

Someone on the Apple Community posted the below. I followed it, and it is working. And, both on my MacMini 15.7.1 and Tahoe MBP...

"What fixed the problem for me on my Macbook Air '13 (2025) is adding multiple accounts before adding Microsoft Exchange, such as Yahoo, Google etc. After that I tried it again, and worked without “failed authentication or unverified account” problems."
 
Something must have changed as I already had 2 iCloud, 1 gmail and 2 Spectrum accounts already setup. Hey I'm just glad it's working... Also I did not have to do a "app specific" password for my accounts. It was able to tell the difference between password only and MFA.
 
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The issue seems to have been fixed. I was able to add 2 Outlook accounts to the Mac Mail app without any hurdles.
 
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This is not fixed in 26.1. To compound matters, it seems to have lead to corruption of my contacts list when I installed Outlook for Mac. Just terrible
 
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This is not fixed in 26.1. To compound matters, it seems to have lead to corruption of my contacts list when I installed Outlook for Mac. Just terrible

I've noticed similar issues starting again in the last couple of weeks. Outlook was not recognizing passwords and the only way to access them was to send a verification to the recovery email address on file. The entire thing is insane. Does Microsoft not understand how important email is for everyone?
 
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With the sheer volume of various issues with Outlook Dot Com, I have switched to another email provider. Not something I really wanted to do, but, the effort involved in constantly troubleshooting, has become monotonous for me...

PS: the latest issue was if I added a new Contact on macOS' Contacts app, it would not sync to iOS. Additionally, after a few minutes, the new contact would disappear from the Contacts app on macOS. Bizarre...
 
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