CiviCRM, SMTP and Office 365?
ah, yes, Exchange. That mail server that behaves almost like the others, but not quite.

You have 3 paths out of that:

1) use a separate "normal" email server, eg postfix for sending your emails and set up a catch all email address on 365 to handle the bounces

2) use a mail provider for your mass mailing (sendgrid, mailjet, amazon aws...). They probably all need you to install a civicrm extension to handle the bounce events

3) contribute a feature to civicrm so it doesn't need VERP. This isn't that far away, the data of the VERP is already added as an extra line in the mail header and for what I've seen, most of the bounce emails copy it.

So the "only" things you'd need: prevent civi to rewrite the from email with a VERP and change the bounce processor to look at the extra header instead of the envelope email.

I'd suggest you 2, mostly because you are likely to have a better deliverability on your mass mailings than relying on exchange.