Split from this thread.
I have the same problem with a single user accessing locally installed O365 apps - especially Outlook. The credential work with online versions of the apps. Opening Outlook triggers a password dialogue box. Entering the password opens another dialogue = "use this account everywhere on your device" . Responding 'yes' triggers another dialogue on screen too briefly to read as it is replaced with the original dialogue asking for credentials again. Trying to log in to OneDrive with the known good credentials simply triggers an error "your account or password in incorrect..."
I have have deleted the stored credentials in the Manager - without this fixing the problem. Interestingly, those credentials have not been recreated.
It might be relevant that this all followed the user having a problem with the lap on the train which resulted in the unit (a Dell Inspiron) restarting in rescue mode and then refusing to boot claiming no boot device was present. Some work in the bios restored that but a Bitlocker (not set by us) lockout them had to be bypassed with the unlock code from the Azure database. Thereafter, all local installations of Office products won't recognise the password