Be sure to check that you are using the current IMAP server, if you are still using the old imap-mail.outlook.com it doesn't support OAuth2. I had to change it to outlook.office365.com and then set the OAuth2 as authentication method for it to work.
Be sure to check that you are using the current IMAP server, if you are still using the old imap-mail.outlook.com it doesn't support OAuth2. I had to change it to outlook.office365.com and then set the OAuth2 as authentication method for it to work.