SMTP supports modern Authentication (OAuth2)

Overview

Microsoft is phasing out Basic Authentication (plain username + password) for SMTP AUTH in Exchange Online, in favor of Modern Authentication (OAuth 2.0). If a mailbox has Basic Authentication disabled, either by your Microsoft 365 administrator, or as part of Microsoft's ongoing rollout, email sent through it via SMTP with only a username and password will fail, typically with an error such as:

535 5.7.139 Authentication unsuccessful, SmtpClientAuthentication is disabled for the Mailbox

For the current status of Microsoft's own deprecation schedule, refer to Microsoft's documentation directly rather than this article:

• Microsoft: Deprecation of Basic authentication in Exchange Online

From Perfion 5.8.2 onward, Remote Connections for SMTP support OAuth2 authentication is the alternative to username/password. Users should use the "SMTP OAuth with Password Token (e.g. Office365)" template when configuring the connection. 

The template can be found under the: 
Remote Connectors > Remote Connection Setup > SMTP connection > SMTP OAuth using password token (e.g. Office365)