Just a couple of weeks or so after our announcement of OAuth support for IMAP and SMTP Auth in Exchange Online, today we’re happy to be able to confirm OAuth support for POP is also now available in ...
Updated May 28, 2020
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It seems Microsoft has changed its plan as explained in this page https://learn.microsoft.com/en-us/exchange/troubleshoot/administration/cannot-connect-mailbox-pop-imap-outlook
There is no plan for Outlook clients to support OAuth for POP and IMAP, but Outlook can connect use MAPI/HTTP (Windows clients) and EWS (Outlook for Mac).
If you're using POP/IMAP and SMTP for an Exchange Online account in Outlook, you must enable Basic authentication for these protocols (until it's permanently deprecated in October 1st). To do so, disable https://learn.microsoft.com/en-us/azure/active-directory/fundamentals/concept-fundamentals-security-defaults if they are enabled.
We plan to use Kiosk licenses for our users. POP is supported but if I have correctly understood, we will never be able to connect Outlook clients to EOL because the Kiosk licenses doesn't support MAPI/https.