IMPORTANT:  When creating email accounts in Plesk user lower case email and domain names.
     Example: user@mydomain.com  
     Do not use: UsEr@MYDOMAIN.COM.  Upper case letters will cause login failures.
     Passwords are case sensitive and can have mixed lower and upper case.

Also, configure your Outlook client to use lowercase usernames as well.

We have reported this bug to Plesk for resolution.