Outlook SMTP Server Issues (SMTPSyntaxError)

I would advise to dump the traffic going from your container to the SMTP server so you can see exactly what’s happening on the wire.

You can trigger an email by running inside the container:

rake 'emails:test[your.email.address@your.domain]' 

and you should see e.g.:

root@michael-discourse-docker-app:/var/www/discourse# rake 'emails:test[michael@contoso.com]'
Testing sending to michael@contoso.com using mail.contoso.net:587, username:michael with plain auth.
SMTP server connection successful.
Sending to michael@contoso.com. . . 
Mail accepted by SMTP server.
Message-ID: e7adb5c4-f404-4800-b070-631b06ff5335@mx1.contoso.com

Which might also give you some clues.