Without using this a registry key there are different problems:
Creating new Outlook profile gives annoying authentication pop-up. After cancel this the profile creation will be succesfull but again after starting Outlook an authentication pop-up. Possible to cancel that again but it gives a lot of questions to the servicedesk. To avoid this the registry key helps but is more a workaround.
If I check the connections when the authentication pop-up is given, you see that the authentication comes from the public folder.
Little detail. When we're migration from 2010 to 2016 we had to disable MAPI over HTTP because after the migration the user couldn't open Outlook anymore. Disable MAPI over HTTP for every user or using the registry key was helping. We choose to disable MAPI over HTTP because it was a proper solution.
Thanks for the addional information. a few more questions what version of Outlook are your running and is it fully patched with the latest office patches? Also where do your Public folders reside (Exch 2010 or Exch 2016)