modern authentication method needed to continue syncing outlook email

I believe you can press the "-" button to remove the account with outdated authentication, then re-add the account. Once you've reached the step where it asks for your name and email, hit "Next". If you get the popup, then the next screen will be a Microsoft sign-in prompt, and that's good.

If you get asked to fill out a username and password without a Microsoft sign-in prompt (i.e., there's no Microsoft logo in the upper left corner), I'm not sure how to proceed. Make sure you're on macOS 10.14 or later.

iOS 11, iPadOS 13.1, macOS 10.14, visionOS 1.1, or later, support Microsoft modern authentication workflows of Exchange micro tenants. OAuth can be used for Office 365 accounts with Modern Authentication enabled. In iOS 12, iPadOS 13.1, and macOS 10.14, or later, configuration can also be performed manually or with a configuration profile.
https://support.apple.com/guide/deployment/integrate-with-microsoft-exchange-dep158966b23/web