With 2FA enabled I could not add an account in Outlook, with 2FA disabled I could. I'm hoping after two years that OP has resolved his issue, but for anybody else that continues to have issues connecting an Office 365 account to Outlook and none of those tools and methods linked in this article helped you, then hopefully you'll benefit from the fruits of my pain.
So something changed in Windows 10 / Outlook 2016 to impact this. I rebuilt the same machine in September 2016 and had no problem with this same setup. The result: I can't use Outlook 2016 for my Office 365 email. The behavior is that because I'm using the same email, Outlook now assumes it's an MSA account and refuses to use the domain with the autodiscovery DNS entry for my domain to resolve to O365 Exchange servers to lookup the account. except it autofills my email as matter if I use my Office 365 (Azure AD) password with what's provided or if I remove "MicrosoftAccount\" from the email address, Outlook refuses to connect to it. Instead, it re-prompts me to enter the credentials. When I try to add my Office 365 account to Outlook, it constantly rejects the credentials I enter. When I try to add another account in Windows 10 for Exchange using the same email, it tells me that email is already in use. I login to Windows 10 with my MSA account. Within Windows 10 => Settings => Accounts, I see my MSA account listed as "Outlook" and can firm it's using a Hotmail server to sync. Outlook 2016 latest (installed from Office 365.I have an Office 365 account with the email I have an old MSA account with the email Windows 10 - Creators Update (but tried this with a fully patched version immediately before updating to Creators Update.
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