I'm not sure if this question was ever asked, but can an Office365 user have multiple working app passwords? In other words, does the latest app password that is created for a user override the older ones?
You can, up to 10 different ones if I remember correctly. And that's one of the reasons you should really avoid using app passwords.
I advise to create a app password per application that you use, to better remove them if you need.
Here is the article and now the limit is 40 passwords.