As a general update on this issue, MS are in the process of removing legacy authentication for SMTP and POP3 which is going to make things difficult if you are using O365 as a mail provider. The default policy applied now is to prohibit SMTP AUTH and you need to enable this per-mailbox. Hope that’s useful — I spent yesterday morning banging my head against this wall.
It’s a real shame about POP in particular, because setting up inbound mail is going to get a lot harder unless Discourse adds IMAP support for inbound mailboxes.