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Due to Microsoft's deprecation of Basic Authentication, the only option available when adding a new Microsoft 365 organization to Veeam Backup & Replication v8 is Modern App-Only Authentication.
When adding a Microsoft 365 organization with Modern Authentication to Veeam Backup for Microsoft 365, there is an option to enable "Allow for using legacy authentication protocols." When this checkbox is not selected, Veeam Backup for Microsoft 365 will use a mode referred to as Modern App-Only Authentication.
Due to Microsoft's deprecation of Basic Authentication, all organizations must be added to Veeam Backup for Microsoft 365 using Modern App-Only Authentication. For more information review: KB4365: Support Statement - Exchange Online Basic Authentication Deprecation
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