Configuring preferences and options in Outlook.com
I'm here as a user with this problem, but I'm also an IS consultant, so may be someone be interested in my opinion. I will try to use the simpler language as possible (but in english is more difficult because I'm italian.)
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Regards from Sardinia, the island of the wind
PS "Granting the access" is only a formal authorization statement, a declaration of consent, you don't have to give your password.
On a technical note, your point is all correct as to how the system should work with exceptions. But to be specific, where you said deleting folder/category (which is involved with a rule) could create an exception leading to the problem we are discussing here. I can tell that this exactly is not the problem here. For that specific reason I've tried many resolutions including your's one already on my colleague's account (with his presence for sure). By adding a folder, setting up a rule for that, then deleting that folder: does not lead to the issue we are talking about here. In fact Outlook's system or software indeed handles it well and does not show up the rule you had set up for the folder, you just deleted. Which is good.
Second, the exception ("error") we see while adding a new rule, is another issue which should not be related to the above problem.
But yes! providing credentials to the moderators, should not be an only solution for Microsoft's tech team. But it only depends if someone will want to give their credentials to solve this issue. For me, I couldn't give mine to have it fixed. A few of us have probably provided theirs and waiting for more than 2 days but with no solution yet. It's just have been proven non-technical support. Their technical staff should have access to delete elements (such as Rules) related to any user from back-end without knowing the user credentials. I still feel deleting those rules at all should fix the issue we are facing.
For now I am waiting for my account to get transferred to the Outlook Mail Preview which started rolling out mid last year. This may also fix our issue because this has been overhauled from deep root. If anyone of us here have been on the new Outlook Mail Preview and still have the Rules issue present, please inform here so that I could forget about this hope too :)
Outlook Mail Preview: http://blogs.office.com/2015/05/21/new-ways-to-get-more-done-in-outlook-com/