Depending on your organizational setup, this message may be misleading. For me, this message is prompted when I change my password used to sign in to Office 365. My version of SharePoint Designer (SPD) is not, in fact, out of date at all. My organization regularly requires password changes so these steps get me back and running with SPD in less than a minute:
- After opening SPD, go to “Accounts” in the left hand menu
- Under “connected services” remove connections for whatever could be causing the issue
- Click “add a service,” then “storage,” then “Office 365 SharePoint”
- Login with your new credentials. This should also link any OneDrive for Business account associated with your O365 account
If a password change isn’t what prompted your issue, try going to “Account” then “Switch Account” to make sure it’s attempting to connect to the correct account.