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Updated Apr 16, 2021
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tfehr I managed to get this to work. I tested on a new laptop where no user profile/Outlook profile was ever created before. The laptop came pre-installed with O365 apps. The ShortenEventScopeDefault setting does not work with older versions of the O365 apps. Simply running an update does not work. I removed the apps and re-installed the apps using ODT. It is important to note that this wouldn't work with Semi-Annual Channel. It is a MUST to have the update channel set to Current Channel or Monthly Enterprise channel. I set to to Monthly Enterprise channel personally. It does not matter if you have enabled the setting manually before from either Outlook Online or Outlook Desktop on a different machine. This behavior goes against what swalker mentioned earlier. Also, important to note is that all my users have M365 Business Standard licenses. So, upgrading to E3 or E5 is not required.
Ref:
https://support.microsoft.com/en-us/office/make-all-your-events-shorter-automatically-8fa0fdcb-5eee-4e12-9452-8d59ee33f70a
https://docs.microsoft.com/en-us/officeupdates/monthly-enterprise-channel
https://docs.microsoft.com/en-us/deployoffice/overview-update-channels