How the orchestrator says that the email has been sent, you must be using log message for that, that’s not sufficient to assume activity worked well.
Ideally if it is not working, it should throw error. Please check if ‘Continue on error’ is on for that activity? Check that k properties panel and if checked, par uncheck that selection.
Try on debug mode and check if there’s any error. If you are able to send manually then the password it not an issue. Otherwise, the activity will do its job and proceed but as outlook is waiting for new password to be updated, it’ll make the emails stay on outbox until password is updated for outlook. Par hage a check on the password too.
Also, can you confirm if you have the, enable script action as on?
Below link would help you to get started for settings part.