The options screenshot you've included isn't the relevant option -- that one is for sending emails.
But that specific error message essentially means that the response from the server wasn't what was expected for an IMAP server, so you may need to contact whoever is providing the IMAP/POP3 server to confirm everything is working ok. If it is, it could theoretically be something on your server that is messing with the outgoing connection (commonly seen with outgoing SMTP connections; I suppose it could happen for other connections too).