If Office didn't see WAM running, there was no automatic fall back to leverage ADAL. This is similar to what occurred 2018 Q4 / 2019 Q1 when Office updated its authentication mode by leveraging WAM on Win10 machines not yet running v1809. Office apps can still run, even if the silent login fails, except Outlook because it still needs to login to Exchange Online.
Recall when running O365 setup, and you get the prompt to sign into cloud, then after, it does the silent login. Office apps with their licenses sourced in the O365 Cloud authenticate there each time you launch one of the apps. That's your clue that the issue is not with Outlook / Exchange, but with the O365 client. They should show connections to the Sharepoint and OneDrive for Business sites tied to your O365 Cloud account. Check the Account settings (File tab > Account) in any Office app - Word, Excel, Powerpoint - and see the Connected Services section. This is not an issue with Outlook, but with the Office 365 desktop client. It's less disruptive than disabling WAM entirely. There's a simpler workaround by removing two Binary String entries under the 'Identity' subkey.
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