Everyone should stop changing eM Client’s default settings for their Microsoft account. Your email is always available through a Web Browser or your Smartphone.
Just log into: www.live.com through any Web Browser.
Everyone should stop trivializing the issue.
Many people have multiple hotmail and outlook accounts. They use a third party client so they do NOT have to use the webportal to access their email account.
It took the fine folks at emClient 4 days to post a sticky on the issue instead of posting it immediately.
Additionally, NOT all hotmail/outlook accounts are affected. Some actually work on eM Client and work without issue on OTHER third party clients like Thunderbird or BlueMail for your PC, Spark, Apple Mail, and Blue Mail (just to name a few for mobile devices).
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You create the app password after enabling 2FA (two factor authentication) in your Microsoft Account security section online. See link below.
Then once you have the app password, you then use that in eM Client when setting up either an IMAP or Exchange account setup.
Using app passwords with apps that don't support two-step verification.
I just tried eM Client and was able to send/receive an email to myself. I then sent another email to a different email account and it arrived as well.
At this moment in time it appears the last few days of agony are gone! Keeping fingers crossed.
Thank you to the dev team either here at eM Client or at Microsoft! Very happy indeed! 
I can confirm. It appears everything is back to normal (for now).
Mine as well fingers crossed
I have tried the Automatic Settings, but it is asking me to generate or import PGP or Disable encryption, and then I still need to enter my Microsoft password. I can’t see any mention of oAuth in the settings ?
Looks like the problem has been fixed. Brilliant!!
I can confirm I just created a new free account with Outlook.com and it appears to work. A previous test account is now also back online. 
I have just reinstalled eM Client and then added my Outlook Account.
I still had to enter Microsoft Password, and create PGP Password.
It then had an error message that Public Key Failed, but it seems to be working
Gary,
Similarly, adding gmail account back, and I create PGP Password. The gmail account appears to be working, but after I get another Error that eM Keybook failed ?
Should I be avoiding the PGP setting ?
Gary
I have removed both email accounts, and added them again, selecting ‘Without Encryption’ for both Outlook and gmail accounts.
It says I can change the encryption settings later, so do I need to set up PGP, and if so, how, to avoid the Error messages ?
By the way, even after the error messages re PGP ? Both email accounts are working as per usual :-))))))
Please see our blog entry about setting up and using PGP.
If the error happens again, please start a new topic on this forum, so it is not mixed in with the MS issue.
Hi Gary , as of this morning, someone somewhere has fixed something and my outlook account is now working again in em-client. ( Microsoft support are still claiming it’s an issue with em client on one particular PC only even though I sent them screen dumps from a test account on another laptop that showed otherwise) Hopefully, everyone else’s problems are gone now as well.
However, I believe em-client need to fix 2 things that are wrong in my current version (8.2.1473 (04b618f) no update available )
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The automatic set up of outlook accounts should select the new office365 servers as per microsoft website. ( the old outlook servers still work but I get an SMTP connection error in em-client and outgoing mails are not saved in my local em-client sent file, this error is fixed using office365 SMPT server.
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Microsoft website state use encryption STARTTLS on port 587 for SMTP settings, this option is missing in em-client drop-down list and should be added - “FORCE SSL/TLS” works but it’s confusing for most users that the option microsoft is telling us to use is not there.
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The automatic setup uses the server names that the server gives. During the setup, after entering your email address, eM Client asks the server what can I use. The server says … and that is what eM Client uses.
Seems everyone has a different name for it. But STARTTLS is not a protocol at all. It is the actual command issued between server and client. The protocol is SSL/TLS. For port 587, to keep in line with the highest security option we force the use of this.
Gary,
You have my utmost admiration for all you have done with regard to the oAuth issue ?
But I never had any issues like this PGP Malarkey before, so, and maybe it’s what Microsoft wanted, I’m off to Windows Mail.
But Thanks again 
Ok I will add to my Microsoft ticket that their servers are giving wrong names, I would expect em-client to raise it with Microsoft as well, it’s not OK that the em-client auto-set-up leaves the user with an SMTP connection error.
Hi I’m having the same issues with Outlook I think its Em Client Problem Not Microsoft
Im using
Mozila Thunderbird
MailBird
PostBox
ALL these clients work Fine i can receive and send Emails Microsoft servers the settings are all the same in the 3 clients
Except EM auto setup and manual selects the wrong server
Garys solution Worked for me
Deleted old Outlook Accounts
Setup manual email account
IMAP should be port 993 and Use SSL/TLS on special port (legacy)
SMTP should be port 587 and Force usage of SSL/TLS
IMAP outlook.office365.com 993
SMTP smtp.office365.com 587
NOW Im getting all my emails again and EM is connecting to Microsoft Severs
Hope this Helps people
Hi I totally agree 100% Im also using Thunder Bird PostBox MailBird ALL WORK FINE
Also the Auto setup Doesn’t select the Right Servers outlook.office365.com