Sorry to necro the thread but just set this up and we came a cropper with app permissions as we don't allow all users to request/consent for apps (even though I'd granted permissions mentioned in the article above)
Managed to get it working by signing in with an account with permission to consent, changing Papercut back to on prem Exchange (our reasoning for moving is to moving towards decommissioning Exchange), changing back to OAuth settings with the correct user account.
Testing with a handful of staff and students and so far so good