Mail on MacBook constantly unable to recognise Hotmail account name & password (and app-specific password)

As title says, my MacBook's Mail is now not recognising my Hotmail account which I have used in Apple products for 10+ years.

I have tried doing the below, which is the top recommended for this issue on the Community pages - in 2 different ways: by adding the app-specific password first and then closing Mail first then waiting 5 mins to open it again, by closing Mail then adding the app-specific password then closing for 5 mins and reopening.

Mail will work again and sync emails... but then it asks me for my password again?

While in Hotmail, Go To:

1. User Name(Top-Right)
2. View account (Second Option Down)
3. Security (third tap in from top-left)
4. More security options (Far-Right)
5. App passwords (Third Pane Down)
6. Create a new app password
7. Click Done
8. Use that app-specific password in the Mail app on your MacBook Pro.

ALSO - I have gone to my Macbook's System Preferences, Internet Accounts, and changed the password there to the app-specific password to match what I've inserted in Mail. Still does not work.

Extra info:

Mail on my iPhone working normal as ever.

Have tried changing my password to see if that's the problem - Mail not accepting this either.

Hotmail working perfectly fine in browsers.

Have restarted my MacBook several times before/after inserting new password into Mail/System Preferences.

Have deleted my Hotmail account from Mail, then added it again. I'll add the app-specific email after I am adding the account again, it will sync up all of my Hotmail inbox, work for 5 minutes, and suddenly it'll ask me for my password again and stop syncing.

I am losing my wits trying to solve this - HELP!