I see from further readings and from experimenting on other platforms with a newer version of thunderbird, that there is significant differences in how the system finally was setup for oauth interaction which is obviously not built into the older version.  :-(

sorry for posting the question which can be easily answered with "there is no way to make it work" in the older version even though the version handles other mail services (gmail) fine. I guess special thanks should be given to MS... :-(

I don't know anything about Mac, but did you try this setting:

- incoming: outlook.office365.com, port 993, SSL/TLS, Oauth2 (assuming IMAP) - outgoing: smtp.office365.com, port 587, STARTTLS, Oauth2

Thanks for the reply and info. Yes those are the settings that are attempting to be used. The issue is that in the "long history" of MS implementation of "oauth", they obviously took a lot of steps to get where they currently are. This appears to have left third party email systems in a lurch along the way, along with "orphaned" of devices / operating systems. The final "nail" was MS "decision" to move to the final step of "oauth" which basically turned off previous "modes".

The main problem with the older Tbird version is that during the 2 step authentication process, the page being called by tbird is a business / enterprise MS office365 page. For a private outlook user, that page and process does not work (although it does for a gmail account using "google.com" as the corporate entity in the authorization options... obviously a different authoring process). Using "microsoft.com" for a similar outlook account, results in the error that I mention which indicates that MS has blocked the app.