Hello Alex,
Dynamics GP has not been tested with multi-factor authentication 'officially', so there is no update that allows GP to work with MFA or anything like that.
That being said, as we're seeing more and more customers using O365 accounts with emailing in Dynamics GP, as well as for the SMTP account and setup for the Workflow functionality in Dynamics GP, we've done some testing on our team, myself included, and we've actually gotten email in Dynamics GP to work fine with MFA enabled and disabled. This includes using the O365 account and SMTP server information to send out workflows.
From what we've seen, Dynamics GP does not prompt the users to authenticate, it just treats it like a regular Exchange account and only requires they enter their email address and password in the Exchange Login window once per session, if using EXCHANGE via System Preferences, and that will allow the emailing to continue.
That being said, if your O365 accounts are not able to email with MFA enabled, if you change the users to not have MFA enabled, then they log back into Dynamics GP, does the email then begin working?
I ask because, while we haven't been able to do conclusive tests as of yet, we're actually seeing bigger issues when the O365 accounts are setup to use 'modern' authentication and not 'basic' or 'legacy' authentication. In fact, we've seen cases where the GP email stopped working when switching O365 users to 'modern' authentication and then it begins working when changing back to the 'legacy' authentication.
Right now we're still testing Dynamics GP with O365 email accounts with both 'modern' and 'legacy' authentication, as well as MFA, to get more conclusive results so we can have GP Development do any updates or fixes we need for the use of O365, because obviously more and more customers are headed in that direction, so we want to be able to accommodate that functionality within Dynamics GP.
However, I would also recommend looking at the following blog if you haven't already done so. It isn't O365 specific, but it is regarding EXCHANGE email functionality in Dynamics GP and some troubleshooting information:
community.dynamics.com/.../exchange-emailing-inside-dynamics-gp
This is also most likely where any updates to Exchange email in Dynamics GP will be added, so we have all the information in one place.
Please let me know if you have any questions.
Thank you,