SMTP Auth is just the protocol extension that allows a client to use Authentication when sending a message https://en.wikipedia.org/wiki/SMTP_Authentication (eg typically SMTP between two MTA's wouldn't use SMTP Auth as they are just transport messages between endpoint). How it relates to basic authentication is that basic authentication is one of the different authentication methods that is supported by SMTP Auth eg (PLAIN).
What Microsoft have done is by default disable SMTP Auth by default in a tenant because they don't want client applications sending email via SMTP eg client apps should be using the Graph, where that is not possible you can re-enable SMTP Auth in a Tenant https://learn.microsoft.com/en-us/exchange/clients-and-mobile-in-exchange-online/authenticated-client-smtp-submission. Previously SMTP Auth was enabled in all Tenants.
Basic Authentication is a different matter and for a different/related reason Microsoft are disabling the ability to use basic authentication across all protocols and API endpoints and this is something you won't be able to re-enable in the future because of the security issues around basic authenticaiton.
So if you need to use SMTP to send email you would use SMTP Auth (which you may need to re-enable in you tenant) and you need to use XOAUTH2 eg in Java https://javaee.github.io/javamail/OAuth2 to generate the access token look at the MSAL library https://github.com/AzureAD/microsoft-authentication-library-for-java