Microsoft has issued a workaround for an Outlook bug which was preventing users from signing in. The Outlook team is looking into the bug for a permanent fix. The bug manifests in two ways. Microsoft has explained in detail below how the issue presents itself:
You are prompted to sign into Outlook for your Outlook.com account and receive the error dialog below.
Or, you already have your Outlook.com account added in the Outlook Profile, but “Need Password” is displayed on the Status Bar. When you attempt to sign in with your Outlook.com account you receive the error dialog below.
“You can’t sign in here with a personal account. Use your work or school account instead.”
As a workaround, Microsoft recommends disabling Support Diagnostics. This is because the bug is thought to be related to how Outlook is authenticating for the diagnostics in some situations.
You can disable the feature using this advisory here: Disable support diagnostics in Outlook. In a nutshell, you can go to Registry and set the “DisableSupportDiagnostics” DWORD value to 1 which indicates True.
You may find more details on the official support article on Microsoft’s website.