Spammers love this feature of Outlook.com. Services like Outlook.com and Gmail are good at ensuring that their servers are not blocked and that their email gets delivered, perfect for spam delivery.
Here is a fun one... You get spam from that appears to be from outlook.com. You look at the email header and find the IP address. You lookup the IP Address registration info and find that it is registered to Microsoft, included in that registration is the email address abuse@microsoft.com. You email abuse@microsoft.com to tell them about the spammer, they respond telling you that you told the wrong people and refuse to send your message to the right people. Microsoft could care less about being a major spam provider.
This is about using a custom domain, and it's not a free feature. It's only if you pay for Microsoft 365 Personal/Family, or any of the 365 business plans. (They're killing it for 365 Personal/Family plans)
Spammers can still use a ...@outlook.com address as before, and if they made it to having a domain + paid Microsoft 365 subscription, Microsoft have a credit card to blacklist.
I get plenty of custom domain name spam that comes through outlook.com (I'm not even talking about M365/O365). Free or not, Outlook.com is abused for spam constantly.
Fair enough. For $7.00 you can add up to 900 domains to one account and spam away for a month. As long as you setup SPF, DMARC, and DKIM then your messages are likely to be delivered. Switch accounts and domains as often as you like. It is not much of a cost and almost all of it can be automated.
Here is a fun one... You get spam from that appears to be from outlook.com. You look at the email header and find the IP address. You lookup the IP Address registration info and find that it is registered to Microsoft, included in that registration is the email address abuse@microsoft.com. You email abuse@microsoft.com to tell them about the spammer, they respond telling you that you told the wrong people and refuse to send your message to the right people. Microsoft could care less about being a major spam provider.