xxxxxx.local isn’t in our system. make sure that you typed it correctly
Outlook is trying to log into Office 365 even though it is connected to the exchange server, which is why the login details never would be accepted but outlook stays connected.
To fix it browse to the registry on the local machine: HKEY_CURRENT_USER\Software\Microsoft\Office\16.0\Outlook\Autodiscover\
Set or create the REG_DWORD “ExcludeExplicitO365Endpoint” with the value 1
Restart outlook and it will stop prompting for the login that it won’t accept.