Please refer to this link for troubleshooting: Fix issues with printers, scanners, and LOB applications that send email using Microsoft 365 or Office 365
There are four possible causes of this issue:
- SMTP AUTH is not enabled on the mailbox being used
- MFA is enabled on the mailbox
- Azure Security Defaults is enabled in the tenant
- The user is included in a Conditional Access policy which blocks Legacy Authentication
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