In the 'olden days' people often had email accounts provided by their home Internet Service Provider, these often allowed using these accounts to send emails without a password as long as you were connecting via that ISP's network. If however you connected via a different ISP e.g. when on holiday then they would treat your connection as untrusted and either require a password to send emails or not allow using their mail server at all.
Also typically in the 'olden days' if you were using say a mobile data dongle or your mobile phone to allow your computer to access the Internet whilst on the road - the mobile network provider might block access to any mail server over port 25 for SMTP that was not their own mail server.
These days the above are less common - partly because almost no-one these days uses an ISP provided email account, partly because everyone normally now has to use a password to send emails and partly because of a change in behaviour in ISPs.
From your post it sounds like you are using Outlook.com or Office365 or Hotmail.com - effectively all the same thing as your email provider. This is a global service provided by Microsoft so not subject to the historical restrictions I mentioned, however I would expect it to always require the use of a password to send or receive emails.
As an aside whilst the main official 'port' number used by SMTP for sending emails is port 25 and this is the still the port number used for one email server to send emails to another email server it is now more typical to use an alternative port number for users sending emails to their own mail server - usually port 587 or possibly 465.
Getting back to Outlook.com this like the other related services of Hotmail.com and Office365 all run on Microsoft Exchange mail server - after all these are all Microsoft services. So that is why you are getting a message about your 'Exchange' password. This therefore is asking for your Outlook.com password.
- One possible solution therefore is to when asked enter your normal Outlook email account password
- Another is to instead of using say Outlook for Windows (or Mac) to use a web-browser and go to https://outlook.live.com/owa/ and sign-in with your Outlook details
I personally use Google's GMail rather than Microsoft's Outlook but the only other think that occurs to me is that Outlook.com is detecting you are connecting from a different location and therefore as a precaution is asking you to re-enter your password to provide you are genuinely you.
