That is a bug - it has nothing to do with the less secure apps feature (which is disabled for Gmail accounts.) When I had the error on a new computer, it worked when I tried later.
One possible solution is in this article - https://www.slipstick.com/outlook/outlook-errorgoogle-sign/
You may or may not need to set Edge as the default browser (if you are using another browser as default.)
Open Edge's Settings and search for Internet Explorer (or open this link: edge://settings/defaultBrowser)
Change one of the following settings (or both, if desired).
Let Internet Explorer open sites in Microsoft Edge to Always (Recommended)
Allow sites to be reloaded in Internet Explorer mode to Allow
-- Diane