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That would only be logical if you are trying to sign in using a work account.
Is the address listed as a work or school account in Windows settings > accounts -look under work or school.
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Outlook never gave me an option to choose between Work or Personal and it was not clear to me until a few days ago.
I removed my domain on the "business" side yesterday. Then I found out that I could not leave the "mydomain" domain on my computer (because it did not exist anymore... duh). Next I followed this thread: https://answers.microsoft.com/en-us/windows/forum/all/removing-work-or-school-account-when-this-pc-isnt/b935af05-b76a-4be2-8301-c81a0644cbbb resulting in executing script "WPJCleanUp.cmd" from https://learn.microsoft.com/en-us/office/troubleshoot/activation/reset-office-365-proplus-activation-state#method2
Finally after removing the Outlook profile and creating another I was able to add the problematic account!
But... now I cannot add other personal accounts I previously had no problems with.
Outlook gives error "Something went wrong [2400]". I think I will close this thread and try to fix that error separately.
@Diane: Thanks a lot for all your support! Keep up the good work.
Regards, Stefan