2FA and Apple Mail on iOS 15.x

[DCIFRTHS]

I am using Microsoft 365 with an outlook.com email address. I have 2FA enabled, and use an authenticator application.

When I setup my email account in Apple Mail, I choose outlook.com, and it displays the live.microsoft.com login page (a redirect in the Safari framework presented in email account setup page I'm assuming?). When I enter my email address, the next page prompts me for my password, hit next, then the 2FA code. My account gets approved, and added into Apple Mail. All is well so far, but I don't understand...

1. Why am I not prompted for my 2FA code ever again? Is this something new built into iOS 15.x? If so, how does this work? I checked, and there is no entry in the Apple Password autofill for this account.
2. Is my password being transmitted securely every time I check for mail? In the iOS settings for the email accoount, there is no option for security. What encryption method is being used for transmitting my password? Remember this password allows access to my Microsoft 365 account, and it has me wondering about security. As an aside - in a Yahoo! account (I know, no jokes please ) there is information for OAuth 2.0 and SSL that are enabled, but not changeable.
3. I prefer to not use an application password to access the email account. This is preference.

I will provide more info if I left anything out.
Any info would be appreciated!

 

[TwitchyPuppy]

I believe it’s because it maintains the connection, instead of having to log into your email account each time. It’s the same thing for me, on my end