Here are a few things I found digging through some tickets on this…
- One user’s 365 license had expired, when updating this it resolved the error.
- Under Admin > SMTP your email address here, should match the email address of the outbound box under Admin > Mailboxes. This seems to be the most common resolution.
*Rick posted a workaround here: BYO SMTP Not working with office 365
One of those should likely work. The error is being generated from the SMTP side, we only validate the credentials on our end so any errors returned are coming from the server/service. The provider may be able to provide some clarity on those.