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Also, at the time, that user did not have MFA turned on. In the instances that this occurs the effected user is not new to MFA but has been running it for at least months. The problem appears to randomly affect users (I’ve had it affect myself once too), and the only solution appears to one of (or a combination of) the options in the OP. Out of 140 staff the problem seems to occur once every 2-3 weeks on average.
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Please help can't afford a new computer if I throw this one against the wall. Yeap, you describe it exactly and unfortunately we still don’t have an answer. Closed the window without entering anything and Outlook returned to ‘Connected to Exchange’. Office 2016 is already Modern Authentication aware so APP passwords are not required.

Microsoft Office 365 Endless Authentication Loop Issue
- Checking the Account in Word showed the correct authentication and subscription.
- It requests me to login to my microsoft account.
- FYI outlook 2013 requires a registry setting to work with MA.
- I have a valid MS 365 subscription that includes 5 device licenses.
- Serious problems might occur if you modify the registry incorrectly.
- Have looked all over and people have all sorts of possible solutions, but nothing we found to resolve the issue and get a new issue daily and just keep going through until it eventually works.
- The user had Office 2015 and Office 2016 credentials and Teams credentials that we deleted.
You may have to rebuild/restore your outlook folder/files which is a pain. I’d do that one step at a repair PST file without data loss time, forgoing the restore of the cached files. If this box is greyed out or disabled then you need to reset the Windows Credential Manager first. Or, any suggestion on how to fix this issue, even better.
Outlook stuck in an MFA loop

Close and open your web browser again and go into connection status shows disconnected 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
Microsoft Outlook 2016 and some recent builds of Outlook 2013 are not affected by this issue. Those versions have been updated to prevent the problem that is described in the "Symptoms" section. These versions have the Logon network security setting disabled or removed from the Microsoft Exchange email account clear Outlook credentials manager settings. It requests me to login to my microsoft account. I then approve the login with my authenticator app. Then i get rerouted to the login page again to repeat the process.