Also did you try going to the Microsoft URL in the error?
https://aka.ms/smtp_auth_disabled
Enable SMTP AUTH for specific mailboxes
The per-mailbox setting to enable (or disable) SMTP AUTH is available in the Microsoft 365 admin center or Exchange Online PowerShell.
Use the Microsoft 365 admin center to enable or disable SMTP AUTH on specific mailboxes
Open the Microsoft 365 admin center and go to Users > Active users.
Select the user, and in the flyout that appears, click Mail.
In the Email apps section, click Manage email apps.
Verify the Authenticated SMTP setting: unchecked = disabled, checked = enabled.
When you're finished, click Save changes.