Hi KarimMneimneh,
To troubleshoot the issue, I need to confirm the following things:
1. It’s seems you deploy SSO. If so, what’s the version of ADFS server?
2. What if you use UPN (user@domain.com) to activate Outlook?
3. Do other users encounter the same issue?
4. Does the issue occur if you use pure Office 365 account (no federated account)?
I would like to confirm if you are an Office 365 administrator. If not, I suggest involving your admin to check the issue as some configurations need to be set up from admin side.
Regards,
Johnny Zhang