Microsoft Office 365 doesn't implement the UIDONLY extension correctly. See modern-email/defects#49. Initially reported on matrix by FLuX.
We "MUST NOT" make decisions about capabilities based on the client software name (from the "ID" command), see https://www.xmox.nl/xr/dev/rfc/2971.html#L93.
The plan is to implement a per-account setting that disables capabilities after authentication. This way, users can work around these incompatibilities themselves, without admin intervention, and without affecting other accounts/users. It will affect all client connections for that account.
To work around the UIDONLY-issue with outlook ("microsoft office 365"), an account would specify just "UIDONLY" in its disabled capabilities list.