Gabriel,
Thanks for your analysis!
I have been beating my head (figuratively) on my keyboard with this issue. I had one hotmail.com account, and one outlook.com account.
I got notice that my hotmail.com account was going away. the hotmail.com account was my "Microsoft Account", so I logically (in my eyes) decided I better make my outlook.com account my "Microsoft Account> Which I did.
Then, to my dismay I realized that my hotmail.com did not entirely go away, just the email portion.
Now, I have the hotmail.com and outlook.com battling over control of my "Microsoft Account". Great fun! I go back and forth with each of them wanting me log into live.com and validate my account. The 2 factor authentication flips back and forth for ownership of my phone number. More fun!
But your statement about hitting "update folder" to get access back to Microsoft Exchange sure worked for me. Its not ideal, but better than what I was dealing with!
Thanks again!