SSL and Sendmail

I have a weird problem.  I set up Sendmail to require SSL authentication, or so I thought.  Using Outlook Express, if I do not have 'My server requires login' and 'My server requires SSL' then it will not work.  When I do check those boxes and try to send mail it pops up a box saying something about SSL cert and I click ok and the mail goes through.  So for Outlook Express is works correctly.  However, if I set up the account in Outlook without authentication or encryption, the server allows Outlook to send the mail.  Also if I telnet into the server and send mail manually it allows me.  Here are the line from my sendmail.mc:

define(`confAUTH_OPTIONS', `A p y')dnl
dnl # The following line is included because Almost no e-mail clients have SSL/TLS certificates.
dnl # You can tell sendmail not to bother to ask for client certificates
define(`confTLS_SRV_OPTIONS', `V')
TRUST_AUTH_MECH(`LOGIN PLAIN')dnl
define(`confAUTH_MECHANISMS', `LOGIN PLAIN')dnl
define(`confCACERT_PATH',`/usr/share/ssl/certs')
define(`confCACERT',`/usr/share/ssl/certs/ca-bundle.crt')
define(`confSERVER_CERT',`/usr/share/ssl/certs/sendmail.pem')
define(`confSERVER_KEY',`/usr/share/ssl/certs/sendmail.pem')

When I telnet in and do EHLO I get this:
250-ENHANCEDSTATUSCODES
250-PIPELINING
250-8BITMIME
250-SIZE
250-DSN
250-ETRN
250-STARTTLS
250-DELIVERBY
250 HELP

There is no AUTH or LOGIN, so why does sendmail allow me to send mail without encrypting first?  Also, why does it not require me to log in with a userid?  Please help.  Thanks.