Exchange keeps prompting for password - possible fix and suggestion
So if you try and use an outlook or exchange account with Apple Mail, if you are using two-factor authentication (2fa) on the MS account, that you can set up the account and it will work after getting a prompt on the authenticator and ok'ing it, but that eventually you will begin continually getting messages from Mail to enter your Exchange password. The fix (found in a post here from Feb) is basically to go to your MS account, create an app specific password, and use that instead of the 2fa. Two things come from having just done this.
First is that the original instructions need slight updating as the location of things is now different (10/29/22). It may change again, but I figured I'd provide those new steps here for others searching this problem.
So first, remove the Exchange account from the list in Internet Accounts (in System Preferences - the grey gears button, skip this if you haven't set it up yet). This is done by selecting the account in the list on the left and clicking the '-' button below that list.
Go to your Microsoft account in your web browser. I went by going to outlook.com and then clicking on my account image (may just be a letter if you haven't set that up) in the far upper right corner of the web page. In the drop down that opens, select "My Microsoft Account".
In the Microsoft Account page, scroll down and expand the 'Security' bar by clicking on it. In the section that is revealed, click on the blue 'Security dashboard' button to go to your account's security page.
In the MS account's security page, click on the large 'Additional security options' button/section to go to the additional security page.
In the additional security page, scroll down (here's the change, go past '+ Add a new way to sign in or verify') and select 'Create a new app password' below the description of app passwords. This will bring you to a new page with a generated App password which you will use with Apple Mail. Highlight the password and copy it to your clipboard (command - c for those new to Mac, like myself, not control - c). You need to create a new app password for each app that doesn't work properly with MS's 2fa.
Go back to (or open) Internet Accounts and (re)create your Exchange account from the list on the right side (click the '+' button below the list of current accounts if this isn't visible). Enter the name you want to use and the email address you are trying to access, then click 'Sign In' (and only once).
In the next window, click 'Configure Manually'. Don't use the Sign In button twice, this would go the use 2fa route that doesn't want to work.
After clicking 'Configure Manually', a new input line will open up below your name and email address that is used for manually entering a password. This is where you put that App Password you generated in your MS account security pages. Paste the app password into the password input section (command-v) and then click the 'Sign In'.
That's everything step wise for creating an Internet Account for a Microsoft Exchange account. Who knows when this may change. Hopefully Apple and MS will figure out some way to make their authentication systems work with each other, I don't know if its even possible.
My suggestion for Apple would be to default Exchange Account account creation towards this process with some instructions and a link to log into the MS account page in order to create the App Password since things currently don't play nice with each other. This could prevent other users from creating it the wrong way, getting continually prompted with the enter password alerts and having to search for how to resolve the issue.
MacBook Pro 14″, macOS 12.4