The "Sign in to your Microsoft account" dialog is provided by Git Credential Manager (GCM) which allow you to just enter your VSTS credential directly without configuring the alternative credential, try to install the latest version and make sure you enter the correct credential to see if it can works correctly.
And according to your description, you have also configured your alternative credentials. Then if the GCM does not work correctly, you can run command:
git config --global credential.helper store
to use "store" as the credential provider instead of "GCM". After run this command, the dialog should not pop up anymore and you need to use the alternative credential when the command line ask for username and password.
By the way, there is another people get a similar behavior as you and logged an issue on the GCM project. Refer to this link for details: Not authenticating any more.