No, they are not. GDPR notices (which this is) must be understandable to the layman. Including all consequences like "this will also allow access to other services secured with the same university/company-wide password".
The German law you cite about getting a password is applicable if you plan to or actually access data they are not authorized to. Which is not the case (assuming they do not).
GDPR deals with privacy. The user name is personal identifiable data. The password is only personal data. The emails themselves can be PII or just personal data. GDPR legally wise, the password is the least risky set of data here (as absurd as it is). Also it is a property of the process. Take a GDPR sheet of a club about giving photographies of your kids to the newspaper. You consent to the publishing of images and give the club data for it (first name, last name, restriction, name of parent, etc). And these properties are not mentioned in the consent but just are part of the process. This is nothing else, just that we are very worried about that the property is a password.
I agree that they should ethically mention that they transfer your password. I also agree that there is no way a layman can understand any consent they grant on the Internet. There is a reason why informed consent in clinical trials (where this can be life and dead) is not just a checkbox but a conversation, quiz, explanations, etc.
> The German law you cite about getting a password is applicable if you plan to or actually access data they are not authorized to. Which is not the case (assuming they do not).
Usually this is the case. The user and Microsoft are not the only parties involved here. The Email provider is also involved in that they provide an email account, often e.g. for work or educational purposes. In those cases, handing over account credentials is forbidden by the workplace or educational institution, providing other people such as Microsoft with access is usually forbidden as well. Other commercial email providers often have similar rules. Therefore either Microsoft is doing unauthorized accesses en masse (since they do know that the aforementioned clauses are widespread common practice) or the users are illegally providing access to Microsoft.
> GDPR deals with privacy. The user name is personal identifiable data. The password is only personal data. The emails themselves can be PII or just personal data.
There is no such distinction in GDPR. There is only personal data according to GDPR article 4. A password is personal data because it is "personal" in that it can be (and is almost always) tied to a person. "PII" is something that only occurs in US law. The definitions are different, "personal data" in GDPR is far broader.
> GDPR legally wise, the password is the least risky set of data here (as absurd as it is)
Depends on what else is in that Inbox and what else this password can access.
> And these properties are not mentioned in the consent but just are part of the process. This is nothing else, just that we are very worried about that the property is a password.
Interesting idea, and yes, GDPR allows for not informing the user about what the user already knows, i.e. a kind of implicit consent. However, the surprise that even experts on HN show about this news demonstrates that the average user doesn't know. So this doesn't apply, Microsoft should have explicitly informed and asked about permission to use username and password.
This could also be a punishable crime in Germany: https://www.gesetze-im-internet.de/stgb/__202c.html and other articles around that one.