If you cancel the credentials dialog box, Outlook 2003 silently enters Offline mode, and you are not connected to your mailbox
KB Article: https://support.microsoft.com/kb/949918
INTRODUCTION
Microsoft Office Outlook 2003 may prompt you repeatedly for a password. If you cancel the credentials dialog box, Outlook 2003 silently enters Offline mode, and you are not connected to your mailbox. In this case, you do not receive an error message or a notification.