Not sure anymore - I think I wanted to add it as IMAP, but it was automatically "autodiscovered" and added as an Exchange account (this I only noticed later on). The whole Office suite was subsequently logged into the MS account, and apparently Edge as well. A couple of days ago I went to File / Office Account (in Outlook or Word) and chose Sign Out, and I later discovered that also the outlook.com mail account wasn't syncing any longer. And when I signed it back in (thinking it would be email account only), the Outlook theme also changed color (the Office Account was logged in again). Oh well.
Under Windows Settings / Accounts / Email & accounts, the MS account has "Apps need to ask me to use this account" under "Sign in options".
I do have Office 2021 if that makes any difference (not shown on my profile here, as the highest option was 2019...). I get the feeling that 2021 is about the same as 365, except that it can be used and updated without the MS account login.
Fun fact: The top 3 queried hosts on my OpenDNS dashboard during the last week: