I think the curl -u switch just requires the password field to be filled

Yeah you're right, if you don't specify the password (eg. -u user), it prompts you for it

there obviously isn't a legit user account test@example.com with a password of password either at microsoft or at the Japanese imap server.

But presumably the fact it's there at all suggests it's a required parameter? Maybe "password" is just a placeholder, but it's unclear based on the command line transcript alone.