Microsoft has disabled basic authentication. If system registry has been edited in the past to add the below registry keys, you will need to remove them so that the Modern Authentication sign in prompt will appear correctly.
Check for the below and remove the DWORD values from the key,
Registry key HKEY_CURRENT_USER\Software
\Microsoft\Office\16.0\Common\Identity
DWORD value (32-Bit) called EnableADAL with decimal 0
DWORD value (32-Bit) called DisableADALatopWAMOverride with decimal 1
After removing the deleting/removing these DWORD values, restart system and try adding exchange email back in to outlook. The modern authentication sign in window should now appear allowing you to sign in to the users mailbox to add to outlook successfully.