QR code for Office365 saying "no 2FA found"

Please remove that QR code image from the forum. It's readable and it might give people access to your Microsoft account!

There are 2 different code types Microsoft offers. One is a proprietary code you can only scan with the mobile Microsoft Authenticator app. This supports push notification and push authentication from the Microsoft Authenticator. It's called "Send sign-in notification" by Microsoft account management. This code is what is displayed in your screenshot. This cannot be scanned and used by 1Password.

The other mfa code option offered by Microsoft is called "Enter a code from an authentication app". This is the generic TOTP secret you can scan with any authenticator app including 1Password. To create that code, choose that option in the security options of your Microsoft account.

I suggest this approach:
* install Microsoft Authenticator app on your smartphone, use the "Send sign-in notification" mfa option in Microsoft account security options and scan the proprietary code. Two advantages: login to your Microsoft account is a one-touch operation from your smartphone and no password handover is required. That's more secure than using your password and mfa code. The other advantage is that you can store your 1Password mfa code in Microsoft authenticator as well, so in case you accidentally lose access to every device signed in to 1Password, or accidentally signed out from all your devices, you still have access to the mfa code required to sign in again to 1Password. The 1Password mfa code is the only mfa code you have to additionally store external to 1Password to avoid a circular dependency.
* Later, when passkey support is officially released by 1Password, or just now, if you install the beta browser extension, add passkeys as login option to your Microsoft account. This is directly supported by 1Password (currently beta browser extension), cloud synced, and more convenient to use than both the push option from the Microsoft authenticator as well as using password+generic totp code. However, it's currently not supported by every browser and every operating system. You have to check if it's supported on your current devices.

Adjusted the image. :)