Lightning Sync validation failure 'service account credentials not saved'

Even though tests with the Microsoft Remote Connectivity Analyzer pass, you may receive a 'service account credentials not saved' when entering the 'Exchange Service Account Credential' in the 'Lightning Sync Setup' page.

• In Salesforce Classic: Setup | Administer | Outlook Integration and Sync | Settings | Expand "Let users sync Contacts, Events or both between Microsoft Exchange and Salesforce | Log in under Connection Method section  
• In Lightning Experience: Gear icon | Setup | Email | Outlook Integration and Sync | Expand "Let users sync Contacts, Events or both between Microsoft Exchange and Salesforce | Log in under Connection Method section  

See also
Run the Microsoft® Remote Connectivity Analyzer with Lightning Sync Parameters   
Lightning Sync: Not Available for New Customers as of Winter ’21