@UnknownSourceCode Thanks for your help but your feedback is not helpful. Ignoring a problem doesn't solve it and there are most likely still many users and servers who use AUTH PLAIN so we should not ignore it
It's not a curl bug. Per SMTP AUTH specifications, the server should reply with a 334 if the base64-encoded auth data is not provided directly in the AUTH PLAIN command. But the --sasl-ir option does indeed allow sending the data as an "initial response" direction in the AUTH PLAIN command.
Had to deal with this problem today, after investigation had the conclusion that Exim configuration on the mail server was the problem, it is needed to have the line "server_prompts = :" in the definition of AUTH PLAIN authenticator, as suggests the official exim documentation