Although Office356 can use OAuth2.0 authentication at Jira Incoming Mail Server configuration, Jira Service Desk doesn't allow you to set it up on Mail Channel using POP3, within JSD we currently only support Google for OAuth 2.0 authentication using IMAP.

https://confluence.atlassian.com/servicedeskserver/receiving-requests-by-email-939926303.html

For Jira Service Desk, we only support OAuth 2.0 for Google. We're planning to add support for Microsoft soon.

Update:

Support for POP for Microsoft will be released in the next LTS bugfix versions - 4.5.12 and 4.13.4. Also, it's included from 4.15 onwards.