@Karthik Palani Good morning I hope you are doing well,
Your issue is like an Office Activation or Authentication Loop
Issue: Older versions of Office, such as Office 2013 or early builds of Office 2016, may not fully support Modern Authentication (OAuth 2.0). When MFA is enforced via Conditional Access, these versions can experience continuous sign-in prompts or authentication loops.
Solution: Upgrade to Microsoft 365 Apps for Enterprise or ensure that Modern Authentication is enabled on existing Office installations.
Reference: Modern Authentication configuration requirementsMicrosoft Learn
Even after removing users from a CAP, the clients may continue to operate with previously cached tokens that were subject to the enforced policy. Until these tokens naturally expire—or you force a complete sign‐out—the “old” conditions may still be in effect. This can be particularly prominent in applications that do not actively refresh their sessions in the background. To troubleshoot, you might try clearing credentials or forcing users to log out and sign back in so that new tokens (issued without the overly stringent policy).
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