Can’t send externally in O365 setup

We are trying to set up contact forms on a website using this plugin.

When we use the SMTP setup for O365 (How to set up a multifunction device or application to send email using Microsoft 365 or Office 365 | Microsoft Learn Option 1) we get the following error when trying to send internally or externally:

CLIENT -> SERVER: [credentials hidden]CLIENT -> SERVER: [credentials hidden]SMTP ERROR: Password command failed: 535 5.7.139 Authentication unsuccessful, the user credentials were incorrect. [LO6P123CA0015.GBRP123.PROD.OUTLOOK.COM]
SMTP Error: Could not authenticate.CLIENT -> SERVER: QUIT
SMTP Error: Could not authenticate.

Note we are using an app password for the user’s password as they are using Microsoft MFA.

When we use Direct Send (option 2 in the above link) we can successfully send internally, but not externally, getting the following error:

SMTP ERROR: DATA END command failed: 451 4.4.62 Mail sent to the wrong Office 365 region. ATTR35. For more information please go to https://go.microsoft.com/fwlink/?linkid=865268 [LO2GBR01FT013.eop-gbr01.prod.protection.outlook.com]
SMTP Error: data not accepted.

Any insight would be much appreciated.