In Outlook 2010 and 2013, users were able to manually add Exchange accounts to the Outlook client by selecting "Manual Setup".
Outlook 2016 manual setup now only supports Exchange Active Sync (EAS), a protocol which Outlook does not support with Microsoft Exchange as per https://support.microsoft.com/en-au/kb/2859522
Outlook only supports "RPC", "RPC over HTTPS" and "MAPI over HTTPS" connections to Exchange server.
The Microsoft "Outlook.com" cloud service however does support EAS connections hence why the option is available in Outlook 2016.
If you try and complete a manual configuration for Outlook 2016, you will receive the following error.
"Log onto Exchange ActiveSync mail server (EAS): The server cannot be found"
Make sure you add the Autodiscover record to your public DNS or alternatively modify the hosts file with an Autodiscover record so the Outlook client can resolve the correct Exchange communication settings.
It is disappointing that you cannot select what method you wish to connect in Outlook 2016 when attempting to perform a manual setup.