Outlook/OWA will prompt for password but will not authenticate.

On Exchange Server security event log:
Event ID: 4625, user login failure. Unknown username and bad password, User not allowed to logon at this computer
Event ID 1035:Inbound authentication failed with error LogonDenied for Receive connector Client Frontend<server>. The authentication mechanism is Login. The source IP address of the client who tried to authenticate to Microsoft Exchange is [127.0.0.1].

Resolution:
Login to Exchange Admin Center->Mail Flow->Receive Connector ->Edit Default Frontend<server>->Security-> uncheck Enable domain security (mutual Auth TLS) under Transport Layer Security (TLS)