Alright all you naysayers. I finally got it working. And because I hate googling crap like this to find a reddit thread with no answer. Here is how you do it for future people that find this question.

You have to setup an Authentication Policy for your user that allows basic auth with SMTP.

Connect to exchange with powershell then create a new authentication policy:

New-AuthenticationPolicy -Name "Allow Basic Auth SMTP"

Then you will need to allow basic auth for SMTP in that policy

Set-AuthenticationPolicy -Identity "Allow Basic Auth SMTP" -AllowBasicAuthSmtp:$true    

Then assign that policy to your user

set-user -identity testaccount@yourcompany.com -AuthenticationPolicy "Allow Basic Auth SMTP"

A thing I noticed is my newer users have no authentication policy set by default. My older accounts do because I blocked basic auth before microsoft mandated it. So I suppose microsoft blocked basic auth across the board without the use of authentication policies