Is there a free way to create a outgoing only no reply email account for alerts on Microsoft 365?
Depends on what exactly you mean. Have you looked into using a shared mailbox or Office 365 Group?
You can create a Shared Mailbox on Office 365 for no-reply and just do not give a license.
If i create a shared mailbox or group with no members, what do i use to setup the SMTP on a device?
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If using it on a device, then you will most likely want authenticated access to allow authenticated mail via SMTP . On the device you can then specify the SMTP server ie smtp.office365.com:587 with the mailbox username, password and email address. This will require using a Office 365 license e.g. Exchange Online only license.