It seems that Microsoft is aware of the issue but they are unable to fix it. I have tried all the communication channels with them but it is a total failure of their support processes.
The only way to fix the problem is to factory reset the phone or buy a new one. All other recommendations don't work.
After upgrading on iOS 16, all Microsoft apps that have been MAM from my company are now crashing. So obviously on my eyes the problem is with the MAM policy applied to the device that it remains hidden on the device even if you remove the management profile. We also checked with the admins of my company the device is not anywhere in Office365, intune and azure ad.