The email address and password authentication step would always fail. However, on Windows 10 devices, that had a pre-installed copy of Outlook 2016 that had been used to connect to Exchange 2010, they could not connect to Office 365 via Control Panel | Add Account. On Outlook 2013 you could happily use the Control Panel|Mail icon to Add a new Outlook Profile for the O365 mailbox. On a recent Exchange to Office 365 migration I was caught out by this “feature” change from Microsoft. When configuring Outlook 2016 client for Office 365 be aware that you may not be able to do this through the Control Panel|Mail icon anymore.
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