Seems I finally got it working.
I had to delete ALL the user’s email configurations. There was also junk traces of the older outbound accounts in the database that I deleted. E.g. older outbound accounts that deleted in the UI but they seem to not be deleted in the database.
So deleted them all and then made a new outbound account Tested and worked.
Added after that a new inbound account and added the outbound to that.
After that was done I head over to the “emails” in the menu and created a new email and it was sent after that.
I have no idea why SuiteCRM does this. It was said I the past that this email password bug had been fixed. Apparently this seems to not be the case.
In the past the user could also add his/her own email which as a work around, but now only the admin can add it so it makes things more complicated too.
Really annoying… 