If you send mail via SMTP using FMP, FMP on your client-computer will actually send the email. Using IWP it will be your FMS on your server and maybe that server is not allowed or able to send the email. I suppose you should check your FMS's SMTP-configuration, firewall etc. something there may have changed because of an update/upgrade of something
You need to run all tests from the filemaker server, not from anywhere else.
Connection refused usually indicates that your server IP is blacklisted from your email server, a bad user/pass combo (you've already disproved this), or the port you are using is closed between the two servers.
The next step will be to work with IT (if applicable) to whitelist the LAN IP of the filemaker server to the email server, and also check to make sure the firewall is open to the smtp traffic on both the email and filemaker server.
Commonly someone from IT will make updates that blocks access without considering filemaker.