Here again your favorite Random Dude in ITNinja,
As we all know, Microsoft is taking down basic authentication (reference here). KACE has a great KB Article to guide us on how to configure the SD with O365 OAuth, but after reading and playing around I found a way to keep using basic auth and have your email flow working.
NOTE: This is not recommended due to obvious security concerns.
Following this guide you're on your own, I do have a particular reason why I was testing this.
This is the error that I got while testing.
I needed to do this specific test without using OAuth so within AzureAD you go to AzureAD > Security > Conditional Access > Block legacy authentication (if you don't have that policy create it from one of their templates)
Then go to Users, be sure to include all users, then at the "Exclude" section enable the checkmark for "Users and groups" and click on Users, then you can search the accounts you may want to exclude.
After adding my test account I was able to use basic authentication for some quick tests that I needed with my SMA.
I hope this information is helpful to others.
Thanks for reading!