OneNote needs a Password to Sync this Notebook

OneNote generally syncs notebook with your logged in Microsoft account to facilitate notebook accessibility from anywhere. This is bit similar to the OneDrive integration in Windows 10/8.1 or later. Thus sometimes it may happen that OneDrive has already sync you notebook and then if OneNote attempts to sync this book, syncing doesn't completes due to following error: OneNote needs a password to sync this notebook. Click here to enter your password.

OneNote needs a Password to Sync this Notebook

Thus it seems like sync from OneNote and OneDrive causes conflicting and hence you experience such kind of error. The culprit behind this could be credential manger for Windows, which manages your user account login details. Now if you're too facing this issue with your OneNote, here is how to fix it:

1. Press Windows Key + Q, type credential in the search box and hit Enter key. Click Credential Manager from the results so appeared.

2. Next, in the Credential Manager, click Windows Credentials first. Then here under Generic Credentials heading, you'll find some credentials with MicrosoftOffice15_Data:live:cid=<16 digit key>. These credentials are causing the issues, hence you need to click them one by one and select Remove.

3. Since these are generic credentials, Windows Credential Manager will ask you the confirmation to remove the login details permanently. Select Yes here:

Once you've removed all the MicrosoftOffice15_Data:live:cid=<16 digit key> labelled credentials, close the Credential Manager and open OneNote. Just sign in now with your Microsoft account, and the error should disappear now.

Hope this helps!