We have disabled Exchange Online legacy authentication and are unable to send the alert emails with legacy authentication, using email address and password. Can you look into developing modern authentication for exchange online?
Modern authentication in Exchange Online enables authentication features like multi-factor authentication (MFA), smart cards, certificate-based authentication (CBA), and third-party SAML identity providers. Modern authentication is based on the Active Directory Authentication Library (ADAL) and OAuth 2.0.
When you enable modern authentication in Exchange Online, Windows-based Outlook clients that support modern authentication (Outlook 2013 or later) use modern authentication to connect to Exchange Online mailboxes. For more information, see How modern authentication works for Office client apps.
When you disable modern authentication in Exchange Online, Windows-based Outlook clients that support modern authentication use basic authentication to connect to Exchange Online mailboxes. They don't use modern authentication.