New Mac Outlook user cannot authenticate Outlook.com account

I first posted this on answers.microsoft.com a few days ago. Here is my thread over there. The moderator could not assist me and sent me here to try again. The original thread includes screenshots demonstrating the problem.

I am trying to use Mac Outlook (16.88), and not the Legacy version, for the first time on my MacBook Air (2022) running Sonoma 14.5.

Our family has a Microsoft 365 Family subscription. I also have an Outlook Premium subscription. I have had my account for years and used it successfully on multiple platforms and devices.

I now want to switch from Apple Mail to Mac Outlook and need to authenticate my email account which is provided by Outlook Premium. (It's a custom domain I have used with Outlook Premium for years.) My Microsoft Account primary alias is the same as my email account address.

When I launch Outlook, which currently has no accounts enabled at all, the pop up prompts me to enter my email address and select the email provider type. I use my primary alias for the email.

If I select Outlook.com, I get this error:

An authentication error occurred while configuring account.

If I select Microsoft 365, I get this error:

Correlation Id: c2b1dc38-9ea3-e447-9a24-300d331ad62f

Timestamp: 2024-08-17T17:17:32.000Z

DPTI: 1e73b114514af1bb4ccf98b9ffe499a0b1f58d1be349f0690462d2bf624bb566

Error Tag: 9hehw

Error Code: 0

I have researched this issue and tried multiple things:

1. I have uninstalled Outlook, deleted everything Outlook-related from the ~/Library directory, and reinstalled Outlook using the downloadable installer from the Microsoft 365 website.
2. I have used Profile Manager to make a new default profile for Outlook and relaunched.
3. I have used the Terminal command suggested in some answers for cases where the user does not have a Teams license, which does not seem to apply here but I tried it anyway.

Nothing has helped and I am unable to authenticate my email account with Outlook. Please note that at no point does it ever get as far as asking for a password or 2FA code. I get these errors as soon as I select my email provider type, either Outlook or Microsoft 365.

I am successfully using this same account with Outlook for iPhone. I set it up last week without any problems. I can likewise use Outlook.com's webmail interface with this account. It's only Mac Outlook that is giving me problems.

How should I proceed?