SMTP AUTH disabled for my personal Outlook.com mailbox – error 535 in Thunderbird

I have a personal Outlook.com/Hotmail mailbox and I can receive email normally in Thunderbird via IMAP. I can also send email successfully through Outlook.com webmail.

However, I cannot send email from Thunderbird.

Thunderbird is up to date and uses OAuth2/Modern Authentication, port 587 and STARTTLS. Two-factor authentication is enabled. I also removed and re-added the account using Thunderbird's automatic configuration.

The SMTP server returns this exact error:

535 Authentication unsuccessful, SmtpClientAuthentication is disabled for the Mailbox.

The error occurs during AUTH XOAUTH2.

There is no option in my Outlook.com settings to enable Authenticated SMTP.

Could Microsoft please check whether SMTP client authentication is disabled for my mailbox and enable it, or explain why it is disabled?

Receiving mail works correctly and sending from Outlook.com webmail works correctly.

This appears to be a server-side SMTP AUTH restriction rather than a Thunderbird configuration problem.