You cannot use the new Outlook app without syncing these data with Microsoft’s servers, i.e. your usernames and passwords are sent to the company’s cloud servers. While the data is sent using TLS, the IMAP and SMTP username and password are sent to Microsoft in plain text. This could allow the company to access your emails, and share the data with third-parties.

Not only that, but sending usernames and passwords in plaintext allows for MITM attacks.