Mark Galvin, sorry to hear that didn't help. I should have also clarified that my environment is 95% Windows 7 and we have a mix of Office builds 9330 up to 10228. On the one machine for which the steps above did not work I took a shotgun approach so I don't know which may have actually resolved the issue (high stress users, never easy to take a scientific approach to problem resolution). In that separate case I performed the following:
- Deleted everything in Credential Manager related to Office
- Applied the regfix/workaround from here https://support.microsoft.com/en-my/help/4025962/can-t-sign-in-after-update-to-office-2016-build-16-0-7967-on-windows-1
- Rebooted
- Signed them out of Office 365 via Word and back in again
- Opened Outlook, success
On a related note, I just tried clearing everything from Credential Manager on a machine exhibiting the error without performing the sign out/in procedure without success (no reboot though...shouldn't be necessary?) After performing the Office 365 account sign out/in process (no reboot) the encrypted messages opened as advertised.