Using New Outlook on Windows for personal email, calendar, and contact management
One potential fix which I haven't seen mentioned here yet, is to disable Offline mode under Settings > General > Offline.
After disabling, restart Outlook app, and the Outbox folder should no longer be visible.
Obviously if you prefer the ability to access your emails/calendar offline, this may not be worth it for you, but for me this seems to have fixed the issue.