Okay, I know this is a long-dead thread but I found a solution that worked for me. *If you have 2FA, make sure to create an app password This was a huge pain for me when setting up the new M1. Hope that works for whoever needs it or stumbles upon this thread.
This meant signing out from the account that wasn’t compatible with the New Outlook (365 account still linked)
Sign out of all accounts in preferences.For me, my subscription was tied to an old Microsoft service called, which didn't have New Outlook integration, and I suspected the Gmail sign-in M1 bug was happening only on the Old Outlook. I had two problems: This one, and I couldn't get the 'New Outlook' button (like in this post) even though my account had Office 365 and all that. Hey everyone, so I figured out a workaround since OP's solution didn't work for me.
