I am having the same issue. I see in my Admin portal that they disabled Basic Authentication for 48 hours. They do say you can turn it back on, but it doesn't seem to work for me.
What is the status of OST working with Modern Auth? It seems we don't have much longer.
Message from Microsoft...
Users not configured to use Modern Authentication with the affected protocol will be unable to sign in.
Affected users must use an email client that supports modern authentication to access their mailbox.
For an immediate workaround, the affected users may use Outlook on the web, and you should consider installing and using Microsoft 365 Apps for business. If your users want to continue using IMAP4, they will need to switch to a third-party application that supports modern authentication.
We will re-enable basic auth for IMAP4 after 48 hours but if you want to re-enable it right away, you can follow the steps outlined here. This document will help you identify users that are configured for basic authentication, and how to enable them for modern authentication.
As a reminder, starting Saturday, October 1, 2022, basic authentication for Exchange Online will be permanently disabled in your tenant."