Unable to Enter Password in Outlook Password Prompt After Federation - ADFS Related?

First of all, make sure that all the relevant events are being logged as older versions of AD FS have them off by default: https://docs.microsoft.com/en-us/windows-server/identity/ad-fs/troubleshooting/ad-fs-tshoot-logging#security-auditing

If that doesn't help you locate the relevant events, you can also enable debug tracing (covered in the above article).

Now, judging by the symptoms, the user seems to be authenticating OK (otherwise you would see an error stating password is incorrect), so the issue is most likely related to the claims issuance part of the process. It might be as simple as incorrectly configured attribute on the user object, but you should also check all your claims rules, including any rules that enforce additional authentication. You can rule out some of the user-related issues by checking the idp-initiated flow: https://docs.microsoft.com/en-us/windows-server/identity/ad-fs/troubleshooting/ad-fs-tshoot-initiatedsignon

The above test will also tell you if the issue is specific to the O365 RPT, in which case you can focus on the O365-specific attributes (objectID and UPN most importantly) and claims rules. And you can always capture a Fiddler trace as well: https://docs.microsoft.com/en-us/windows-server/identity/ad-fs/troubleshooting/ad-fs-tshoot-fiddler-ws-fed