iCloud Windows "Your setup couldn't start because your username or password is incorrect."

I am helping a client with a new Windows 11 laptop and Microsoft 365 Professional. Using Outlook, the client wants to (understandably) be able to see their iCloud Contact and Calendars, and synchronize them. I have successfully done this for a number of clients.

However, with this client (and using a brand new version of iCloud for Windows), although I am able to synchronize things like Photos, iCloud Drive, Passwords, etc, I cannot get the Calendars and Contacts to sync with Outlook. Although I can enable the option, the following window pops up:

Obviously the correct iCloud userid/password are being used, since I was able to successfully sign into iCloud for WIndows and was able to synchronize Photos, Apple passwords, and iCloud drive. The iCloud summary screen even shows that 'Calendars and Contacts' are turned on. However, in Outlook, there are no iCloud contacts or calendars (I didn't attach a copy because the image is pretty large).

There are older postings on this forum where people had similar problems, and I tried the suggested options (signing out/in, repairing the iCloud/Outlook app, even uninstalling/reinstalling iCloud for Windows - but nothing worked.

If anyone has any ideas, they would be greatly appreciated. Thanks in advance.