The current Cloud 2 setup uses Outlook 2012 and Microsoft have provided registry key changes to allow Modern Authentication to work with Outlook 2013. Modern Authentication configuration requirements for transition - Exchange | Microsoft Docs
⚠️ Important: This is not affecting all clients using Microsoft Office 365 in Outlook but a smaller subset, showing that Microsoft have not fully rolled this out to the client base.
Access are currently testing these registry fixes in the Cloud test environment. We will then be evaluating the impact on these changes to modern authentication accounts as well as those that have not been moved from basic to modern authentication accounts (which currently is the large majority) to fully understand the change before putting in a change request and implementing said change.
This is a crucial step that needs to be conducted to ensure platform stability.
If you are affected by this issue the steps we can advise for now are:
Use Outlook Webmail - Log in with email address and password.
If Outlook Web Mail is not ideal, then download Outlook to local machine (Your IT company can provide steps on that) then run Outlook locally in an adjacent window using ALT-TAB to flick back and forth. Sending email from Profile has no issue.
If you are still having issues, please raise a new online case with the support team and provide us with details of what has been done so far.