I am having the same exact issue, as well. Yesterday Windows offered a suggestion to suppress Outlook (New) notifications, since I hadn't engaged with them, and I believe I accidentally clicked yes or confirm. However, all of my settings are correct both in Windows 11 and the new Outlooks settings.
Calendar event notifications work just fine. I am able to receive pop-up "toasts" notifications as well as them showing up in the "Notifcations/Action Center" in the bottom right of the Windows 11 task bar. Reactions to email also show a notification. However new emails do not show up. I get the envelope icon on the new Outlook taskbar icon, but no "toast" pop-ups or emails added to the Windows 11 notifications/action center.
Is this a bug in the program? I have tried repairing and uninstalling and reinstalling the app. Nothing seems to resolve this issue.