Surface Laptop 7 ARM64 – KB5121003 breaks Teams and New Outlook

We are seeing a repeatable issue on a Microsoft Surface Laptop, 7th Edition (ARM64/Snapdragon) running Windows 11 Enterprise 25H2.

After installing KB5121003, both Microsoft Teams (new) and New Outlook for Windows stop working. They either fail to launch or close immediately. Classic Outlook, Word, Excel, and other Win32 applications continue to work normally.

This machine had recently been factory reset and was working properly for several days before KB5121003 was installed.

During troubleshooting, I found the following:

• Microsoft.OutlookForWindows reported Status: DependencyIssue
• AppModel Runtime logged 0x80073CFC
• The Outlook failure specifically referenced GetPackageToken
• Windows reported an error while checking the application's machine-level package status
• New Outlook's package showed PackageStatus = 64 (0x40)
• Teams AppModel logs showed the application process/container being created successfully, but the process terminated almost immediately
• Teams also showed a previous package status of 0x40 before AppModel reset it to 0x0

As a test, I uninstalled KB5121003.

Teams immediately started working again.

This is especially concerning because we experienced an almost identical issue earlier this year after installing KB5094126 on the same Surface. At that time, Teams and New Outlook also stopped functioning, and removing the update restored them. During that incident, MicrosoftWindows.Client.CBS also reported a DependencyIssue.

Since the machine was factory reset between these incidents, this does not appear to be the result of an old or heavily modified Windows installation.

The pattern we have now seen twice is:

• Surface is working normally
• Windows cumulative update installs
• New Teams and New Outlook stop launching
• AppX/MSIX package-state errors appear
• The cumulative update is removed
• The affected applications work again

Has anyone else seen this behavior on Surface Laptop 7 / Snapdragon / ARM64 devices?

I am particularly interested in whether anyone has seen:

• KB5121003 causing Teams or New Outlook failures
• 0x80073CFC
• GetPackageToken errors
• DependencyIssue on Microsoft.OutlookForWindows
• PackageStatus 0x40
• Similar recurring AppX/MSIX issues after cumulative Windows updates

At this point, I am concerned there may be a Windows 11 ARM64 servicing or AppModel/MSIX compatibility issue affecting these applications. I have also opened a Microsoft support case because repeatedly uninstalling cumulative security updates is obviously not a sustainable solution.