Alright. Found a few threads regarding this, as well as Atlassians poor documentation in the matter.
I am in a hybrid Exchange environment. But mailbox and authentication is done in 365/Azure.
What I've seen working before for connecting a mailbox:
Azure AD only shared mailbox with password set.
What is not working but really should according to Atlassian:
MFA enabled and enforced.
Dedicated App Password created
Block Basic auth. That means basic auth is turned off, but App Password is not concidered Basic auth so that should be fine.
Anyone actually got this working. The only way I got it working is by bypassing MFA in an Azure policy, but we do not want that want we?
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