I have the same problem.
Periodically (once a week or something like that) some dead contacts reappear in my Outlook.com contacts.
I tried to delete them by various means - via Outlook.com web interface, via Windows 10 phone contacts app, via desktop Outlook app - no luck. I even remove them from dumpster (via 'restore deleted items' menu), but they still live somewhere on the server
and reappear again and again. Some of these reappeared contacts are empty entries, some of them named 'Q' (just one letter) without contact details inside.
Interesting fact: when I'm trying to import contacts from Outlook.com to Gmail, Gmail (via third party provider ShuttleCloud) pulls 262 contacts from my Outlook.com account, though only 77 are visible in Outlook.com, desktop Outlook app and People app on
Windows 10 phone. Most of these 262 contacts are empty entries or entries named 'Q' (just one letter).
Finnaly, a week ago I decided to setup my Windows 10 phone with a new dummy Microsoft account to avoid syncrhonization of the broken contact list and added two additional accounts - a Gmail for contacts sync and my old Outlook.com for email only. Contacts
seem to stop reappearing at the moment. I'm also avoiding to log in to my Windows 10 PC with Outlook.com account so far.