Welcome to our forum!
Looks like the issue is more related to Azure, please kindly understand that the Outlook tag here we mainly focus on general issues about Outlook desktop client. The following is for informational purposes only.
Based on my search, this seems to be an MFA error code. This typically occurs when authentication fails in a multi-factor authentication (MFA) request, which can indicate a configuration or service error. To resolve this issue, can you try resetting (requiring re-registration) of MFA for the user. With this user will be asked to re-register for MFA. Once the registration is done for user, you can again try to login, and it should be successful.
Note: You will have to use global admin account to login to Azure portal and select the option "require re-register MFA".
Hope this helps!
If the answer is helpful, please click "Accept Answer" and kindly upvote it. If you have extra questions about this answer, please click "Comment".
Note: Please follow the steps in our documentation to enable e-mail notifications if you want to receive the related email notification for this thread.