I have a very strange issue! SASL does not work properly, as it does not accept plain-text passwords (like Outlook sends them)

Oct  2 10:35:09 srf cyrus/imap[4119]: accepted connection
Oct  2 10:35:09 srf cyrus/imap[4119]: badlogin: [217.XX.XXX.140] plaintext [email protected] SASL(-1): generic failure: checkpass failed

Now I switch to "Encrypted password" in Thunderbird. I have the same issue as Outlook above on Thunderbird if I turn on "Plain Password"):

Oct  2 10:40:40 srf cyrus/imap[14644]: accepted connection
Oct  2 10:40:41 srf cyrus/imap[14622]: login: [217.XX.XXX.140] [email protected] CRAM-MD5 User logged in

Same with Postfix:

Without

Oct  2 10:42:48 srf postfix/smtpd[17980]: connect from unknown[217.XX.XXX.140]
Oct  2 10:42:48 srf postfix/smtpd[17980]: warning: SASL authentication failure: cannot connect to saslauthd server: Permission denied
Oct  2 10:42:48 srf postfix/smtpd[17980]: warning: SASL authentication failure: Password verification failed
Oct  2 10:42:48 srf postfix/smtpd[17980]: warning: unknown[217.XX.XXX.140]: SASL PLAIN authentication failed: generic failure

With "Encrypted password":

Oct  2 10:45:27 srf postfix/smtpd[21872]: connect from unknown[217.XX.XXX.140]
Oct  2 10:45:28 srf postfix/smtpd[21872]: 50B3A332AAB: client=unknown[217.XX.XXX.140], sasl_method=CRAM-MD5, [email protected]
Oct  2 10:45:28 srf postfix/cleanup[21899]: 50B3A332AAB: message-id=<[email protected]>
Oct  2 10:45:28 srf postfix/qmgr[6181]: 50B3A332AAB: from=<[email protected]>, size=398, nrcpt=1 (queue active)
Oct  2 10:45:28 srf postfix/smtpd[21872]: disconnect from unknown[217.XX.XXX.140]

Config:

/etc/imapd.conf:sasl_mech_list:LOGIN PLAIN CRAM-MD5 

and

/etc/postfix/sasl/smtpd.conf:mech_list: LOGIN PLAIN CRAM-MD5

I have no idea where to dig. Please advise.