I also have some users where outlook sometimes wants password for SSO in the VDI. It happens now and then for some reason.
And I also see that users who starts outlook, outlook will "crashes", and when users starts outlook again, users get a dialogbox asking if they want to start outlook in Safe Mode.
We are running similar settings as you in DEM, but i also have this in the ExcludeFolderTrees:
[ExcludeFolderTrees]
<LocalAppData>\Microsoft\Office\16.0\Licensing
This is because we are running FSLogix Office Container, with these GPO settings:
When that said, during troubleshooting I have also tested this with no FSLogix, and experience the same... but not every time..
We're currently running Microsoft Office 365 16.0.16130.20332, and i have prepared Microsoft Office365 16.0.16827.20130 for testing.
Which office version are you running?