Outlook 365 says 'Wrong Password' when trying to sync with iCloud for Windows 12.5
I'm setting up a new Windows 10 PC that has Office 365 installed. After installing the latest iCloud for Windows (12.5), it gave me error when I'm trying to check on the mail, contacts and calendar sync feature. I found online a workaround to install the old Win7/8 version of iCloud for Windows and was able to get iCloud for Windows and Outlook synced after that (calendar & contacts synced succesfully, but emails did not).
To try to fix the email syncing, I updated iCloud for Windows back up to v12.5. However, after updating, Outlook now says Wrong Password when trying to sync with iCloud for Windows. I also noticed whenever I open the iCloud for Windows settings dialog box, it will always prompt me to re-enter my password, and will always initiate the 2-factor authentication.
It looks like the authentication between Outlook and iCloud for Windows is broken, and iCloud for Windows and the iCloud server is also broken. Can I get some assistance in trying to resolve these issues?
Windows, Windows 10