The per-mailbox setting to enable (or disable) SMTP AUTH is available in the Microsoft 365 admin center or Exchange Online PowerShell.
Open the Microsoft 365 admin center and go to Users > Active users.
Select the user, and in the flyout that appears, click Mail.
In the Email apps section, click Manage email apps.
Verify the Authenticated SMTP setting: unchecked = disabled, checked = enabled.
When you're finished, click Save changes.
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