In the handleAuthorization flow, put a breakpoint on the REST activity, or the log activity below; check out the latestHttpResponse given by Microsoft there. It seems to me you have received an authorization key that can be redeemed for an access token, but the call to the token endpoint is failing somehow. Microsoft is usually quite clear in the error feedback. I have indicated below where to put the breakpoint;
Then check console right there for the relevant information in the $latestHttpResponse/Content; It could be that your Azure App is not properly set up for token redeeming, etc. This message will tell you what is going wrong. I can help with an app Manifest if need be.
Hope this helps; if it does, please mark this as the correct answer ;-).
Not the answer you are looking for but a workaround would be to use the SAML connector. Because that one works for sure with MS Azure.