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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.
Additional resources
This is now the 2nd machine that presents the same issue. I have a valid MS 365 subscription that includes 5 device licenses. On the main machine where I have been using the suite, now my account is deactivated and if I try to authenticate, it looks like it works but then get the "Fix", "Authenticate", "Activate" or "Resolve" buttons, all of which do nothing. I checked my MS account info page, subscription is fine. I had this exact issue on another machine, that after 2.5 hours on the phone with MS support (via Zoom), the solution was to uninstall MS Office 365 and reinstall it.

Microsoft Office 365 Endless Authentication Loop Issue
- I even tried disabling my anti -virus while authenticating, that didn't work.
- We too have been seeing this more and more, all W10 on O365, although we use Okta as our MFA.
- Microsoft Outlook 2016 and some recent builds of Outlook 2013 are not affected by this issue.
- We have been experiencing the exact same issue for months now.
- If this box is greyed out or disabled then you need to reset the Windows Credential Manager first.
- We had the issue where Outlook 2016 kept prompting for a password for an Office 365 user whose laptop was connected to their Office 365 account using Windows 10 Pro.
- The repeated issue logging in started after I enabled the modern authentication in the Office 365 administration panel.
- In fact if you just turned on MFA and you were not using MFA before you usually end up having to rebuild the profile and clearing the credential manager.
You may have to rebuild/restore your outlook folder/files which is a pain. I’d do that one step at a more helpful hints 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

I do NOT have this issue with the other laptop, an iPad, a MacBook Pro and FixTechGuide support for Office 365 tablet. So figuring that was the same issue here, I did the same thing. I'm also getting Error 29, which the MS support rep couldn't explain to me. I even tried disabling my anti -virus while authenticating, that didn't work.
Outlook 365 Password Prompt Issue on Windows Desktop
So not doing anything at all even seems to work. Which to me sounds send/receive error 0x800CCC0E Fix like the issue is service side, not client side. Problem doesn’t just happen on PC’s connected to the internal network, but can happen when a laptop is remote and connected via external wifi or mobile hotspot.