3301891 - The Workflow Capacity Mail Destination with OAuth2Password failed with error "Bad credentials"

To send notification mails for mail tasks with a workflow, you configure a mail destination with authentication type OAuth2Password. Office365 is used as the email exchange server.  But it's throwing an error as follows during runtime:

"Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental."

• SAP Workflow Management, workflow capability

The destination service did not return data for destination 'bpmworkflowruntime_mail' using authentication type 'OAuth2Password''. The error message returned was: 'Bad Credentials', bpmworkflowruntime_mail, OAuth2Password, Office365 , KBA , LOD-BPM-WFS , Workflow Service Runtime / Editor , Problem