I created a new Outlook.com email address instead of renaming existing. How can I free up the new account?

Thanks for that. But it does appear that if the address has been made an alias at some point, you cannot simply make it the primary address and go from Step 1. Tried that with a couple of test accounts and it still says its unavailable. Of course I may have made a mistake somewhere a long the line, but I think it only works if the original address is untouched (i.e. not renamed/made an alias).

I've found a solution. 

Please be sure to create testing account to verify below steps before applying to your real account.

Assumptions: you have both account@hotmail and account@outlook email accounts, and account@outlook was NOT previously made as alias and deleted

Step 1. <gmail> apply for accountXXX@gmail in gmail (or other email supplier)

Step 2. <outlook> Login account@outlook, click "your name" at top-right of the browser, and choose "account settings", and then click "Update email address", and change your email account to accountXXX@gmail

Step 3. <gmail> in gmail, open the new verification email, click the url, and login your outlook using accountXXX@gmail account

Step 4. <outlook> It will prompt that you are ready to use your new account. DO NOT CLOSE THIS WINDOW, AND DO NOT LOGIN AGAIN. You will find your name at the top-right of the browser, click your name and choose "Account settings", and "close account" immediately.

NOTE: if you login again after verifying accountXXX@gmail, the old account@outlook will be made as alias of  accountXXX@gmail, and previous work will be wasted.

Step 5. <outlook> login account@hotmail, click the gear and choose "more mail settings", and then click "Create a outlook alias". You will find that account@outlook can be added to your account as alias.

Please to noted, when I used testing accounts to verify previous steps, I failed in the following 2 cases

1. account@outlook was previously deleted as alias, due to previous solution to wait 30 days to free alias...
2. In Step 4, logged in again, and account@outlook was made as alias after login... I'm not sure if making account@outlook the primary address and start all over again from step 1 would help or not.

Ok, nice work. Just so I am clear, in my case I will have to wait the 30 days?

1. I created new account on release day
2. I first renamed the .outlook hoping to free address
3. I then deleted the account, but have since logged back in
4. It's currently at the renamed address, desired is not available

So I will need to wait 30 days, correct?

It worked :). I renamed my account instead of creating an alias and it went through as though you'd never registered your ******@outlook.com account in the first place.