That checkbox doesn't matter.
What's happening here is:
That's Microsoft's login page, AquaMail has no control over its appearance or function.
After you log in -- with Microsoft -- and "grant" AquaMail the permission to access your email:
Microsoft's login page turns around and lets AquaMail know an "OAUTH token" which the app then uses in place of your password, to log into your account.
The "token" is not related to the password, so in the end, AquaMail will be logging into your email account without knowing or storing or transmitting the password.