The Outlook add-in supports different methods to authenticate your users.
Most recommended is using OAuth. It is possible when you have installed our Jira app and configured the application link correctly. The Outlook app will show a warning on top when using a different authentication type.
Jira Cloud provides API Tokens that can be created by users instead of using the actual password. Consider it as a password only for this application.
We only recommend API Tokens for the evaluation period when the Jira app is not installed yet. Make sure to invalidate the API Token once you have switched to the recommended approach OAuth
Username & password
Jira Server does not provide API Tokens, so we have to fallback to plain username & password, if the application link for OAuth us not set up correctly.
Again, we only recommend username & password for the evaluation period when the Jira app is not installed yet. Consider changing the password, once you have switched to OAuth.