In this case are you saying that there is a password prompt for the users credentials? Clear the Windows Credential manager or recreate the users Outlook profile. In fact if you just turned on MFA and you were not using MFA before you usually end up having to rebuild the profile and clearing the credential manager. If you are saying that they are getting multiple MFA prompts then this is an out of sync issue with the wrong code being used.

Additional resources

This is now the 2nd machine that presents the same issue. I have a valid MS 365 subscription that includes 5 device licenses. On the main machine where I have been using the suite, now my account is deactivated and if I try to authenticate, it looks like it works but then get the "Fix", "Authenticate", "Activate" or "Resolve" buttons, all of which do nothing. I checked my MS account info page, subscription is fine. I had this exact issue on another machine, that after 2.5 hours on the phone with MS support (via Zoom), the solution was to uninstall MS Office 365 and reinstall it.

Microsoft Office 365 Endless Authentication Loop Issue

• Native IOS and Android Mail apps will require the APP password or users can use Outlook for IOS/Android which is Modern Auth aware.
• We’ve got a support case opened with Microsoft on this one but it’s been open for about 3 months.
• There doesn’t appear to be any pattern to the issue occurring or the problem being limited to any specific computer or user.
• We are looking at using conditional access policies where a user with a Domain joined PC is not prompted for MFA.
• I checked my MS account info page, subscription is fine.
• When we opened the old, existing profile it didn’t ask for ANY authentication, it just started working.
• The user could use the Windows mail and calendar apps but Outlook wouldn’t connect and kept prompting for a password.

When we opened the old, existing profile it didn’t ask for ANY authentication, it just started working. Modifying the Outlook profile by using the "Profiles" registry path is not supported and may cause your Outlook profile to be in an unsupported state. resolve Outlook not sending emails fast Serious problems might occur if you modify the registry incorrectly. Before you access it, back up the registry for restoration in case problems occur. We are looking at using conditional access policies where a user with a Domain joined PC is not prompted for MFA.

Outlook stuck in an MFA loop

Close and open your web browser again and go into rebuild Outlook data file quickly SuiteFiles. You will most likely need to enter your Microsoft 365 credentials again so ensure you tick any box that says remember my credentials but it should now work for all future documents you open and not require your credentials. Upgrade to Microsoft Edge to take advantage of the latest features, security updates, and technical support. I regret that you are experiencing issues with your Microsoft installation.

Outlook 365 Password Prompt Issue on Windows Desktop

So not doing anything at all even seems to work. Which to me sounds work offline mode stuck like the issue is service side, not client side. Problem doesn’t just happen on PC’s connected to the internal network, but can happen when a laptop is remote and connected via external wifi or mobile hotspot.