I'm was this issue with one server I use. I fixed this by asking for the
supported server options. It then gave me either PASSWORD or GSSAPI. I
changed to GSSAPI, then restarted. This failed completely. (I suspect a
half-configured setup on the server side - they probably tried to get
GSSAPI set up but it never really worked and they left it marked as a
supported option.) I then converted back to PASSWORD and restarted. It
now seems to have successfully saved my password!

Oh happy day!

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Evolution will not remember exchange password
https://bugs.launchpad.net/bugs/107974
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