Please also note that atleast for M365 licensed version of Outlook for Mac (version 16.57) now forces sync to microsoft cloud by default when adding IMAP account:
(says in image: For better experience, your messages will be synced to the Microsoft cloud)
I cannot opt-out from this. (Just realised that this actually might be something forced by my employers Intune policies)
And indeed after I continued to add the account the incoming IMAPS connection to my dovecot server came from 52.98.150.133 wwned by Microsoft.
I do no think it is related with settings. I have a 'airlocked' test environment with exch 2016 and I was surprised that the mobile outlook app is also connecting to the microsoft cloud. Which really surprised me, that must be against all GDPR legislation. Thus currently if you have an exchange server you can not get email on mobiles without using a 3rd party app. They are totally mental at microsoft.