Password reset emails can't use M365 channel?

Notification channels do neither support Microsoft nor Google.
You can see a remark on this and also an explanation on the end of the documentation pages that are affected:

https://admin-docs.zammad.org/en/latest/channels/microsoft365/accounts.html

This is currently a hard limit. If you think this is a missing feature, look if a feature request exists and if not create one here: Feature requests - Zammad - Community