In my outlook profile, I have a connected hotmail account along with my work email account. The error I get: This message could not be sent. You do not have the permission to send the message on behalf of the specified user.
I tried creating a new profile, it worked for a while and then stopped. Sending from the mail app or web outlook works fine. I also have a @live.com connected account in the same profile. It works fine.
I want to update this thread in case if somebody rans into a similar problem. I created a new profile with my Hotmail account as the default. Then I added my work account to it. So far, I didn't see any errors when sending email from either account. However, the conditional formatting I have used in my other profile doesn't work (has no affect). I am not sure it is related though. I am following up with support on that specific issue separately.