For convenience, team members in my group keep each other in the loop on days when we'll be out of office. The problem is that there is no standardized way to do this, so people do it in different ways. One common approach is to send an invitation such as "Jon Out of Office" for 7:00 AM, and invite everyone in the group. Team members can then accept it, but it ends up pinned to 7:00 AM on the calendar instead of showing as an all-day event.
Another approach which works is to create an invitation for an all-day event, send it to everyone on the team, but have it show as "Free" instead of "Busy" or "Out of Office" on the calendar. That way, it won't book co-workers' time for the day, making my day off show up as Busy on their calendars.
This approach works....but it's basically a workaround. You have to create a second calendar entry to actually block the time on your own calendar. It'd be great if Outlook had some native functionality for this. Other ideas would also be very much welcome.