Patrick Koerner thank you for the feedback. In 16.15 (July production release) we did make a change to request only Email permissions when adding your account via IMAP. You are correct -- adding your account via IMAP only syncs Email, so Outlook only needs to request permission to Email. (Note that while the auth flow is updated (now using OAuth instead of Basic) there is no change to the sync via IMAP). If you are using IMAP, please update to 16.15.
For O365 subscribers, the new default for Google Accounts now syncs Calendar and Contacts, and as part of the new sync functionality we do now need to request permissions for Email, Calendar, Contacts, and Drive (the Drive access is required for attachments). You can still click "Not Google?" during setup and then select IMAP if you would like to configure your account as IMAP instead.
OAuth support has been a long-time request, due to having to set "Allow less secure apps" and using app passwords when 2-Step is enabled. I understand there may be some confusion after upgrading. We have a "What's New" entry on support.office.com with links to more information: https://support.office.com/en-us/article/what-s-new-in-office-365-95c8d81d-08ba-42c1-914f-bca4603e1426?ui=en-US&rs=en-US&ad=US
Thanks again for your post.