Hey @Dylan,
I hear you, buddy. When I was researching this topic, I found out that Exchange comes with a few MDM capabilities, such as remote device wipe. So, I think this might be the reason why the Stolen Device Protection (SDP) is trying to prevent you from adding an Exchange account to your device.
https://learn.microsoft.com/en-us/mem/configmgr/mdm/deploy-use/manage-mobile-devices-with-exchange-activesync#:~:text=If%20you%20have,multiple%20Exchange%20servers.
I just want to share a few insights I had while testing this that could be of help. When Apple released this feature with the iOS 17.3 update, they might have intended that no critical changes should be made when the iPhone is in an unfamiliar location. So, whenever your device is in an unfamiliar location, you have to go through a security delay in order to make changes to any critical settings mentioned by Apple. You can’t even turn off the SDP when you are in an unfamiliar location without waiting through the delay period. Apparently, Apple wants users to have this extra layer of protection where they can mark the device as lost within this 1-hour span of the delay period.
So, after the delay period, you get to use biometrics to turn off the SDP in order to make any critical changes to the device. From iOS 17.4, though you still have to wait throughout the 1-hour delay period when your device is in an unfamiliar place. After the delay period, this time you don’t have to disable SDP to make any critical changes on the device. You can just use your biometrics to make changes to settings individually. Each option can be unlocked using your biometrics and modified.
PS: As I mentioned, when your device is in an unfamiliar location, only the device biometrics like Face ID or Touch ID can be used to modify those settings. You cannot use a passcode to turn off stolen device protection. Even after the delay period is done, you must authenticate with biometrics to make changes to system-critical settings. This could be a step to ensure that the device is with its owner.