Basic Authentication Deprecation in Exchange Online – September 2022 Update

ffinlo Blocking basic auth will break app passwords, but that does not mean that if app passwords are configured in Azure (Configure app passwords for Azure AD Multi-Factor Authentication - Azure Active Directory - Microsoft Entra | Microsoft Learn) that those settings will disappear or get changed once basic auth is blocked. My suggestion would be to create an authentication policy and test to see what will happen in your specific scenario. But generally speaking - we are going to be blocking basic auth on Exchange Online level so there could still be some configuration changes that you might need to do on Azure side if you had that configured for app passwords before, and it should be testable what the experience will be if you block today using auth policies.