Update: Please see Boby's answer. This approach works, but Boby's solution is far simpler and more practical.
After much searching (and fruitlessly asking this same question at answers.microsoft.com), I've finally come up with a workable, if complicated, solution: Running Davmail locally as an exchange proxy, then configuring Outlook 2016 to retrieve mail via imap and my calendar via calDav. I'm posting the procedure here for anyone else that might be having a similar problem.
NOTE: Davmail's stated purpose is to enable Mozilla Thunderbird (and other clients) to communicate with exchange servers. Thunderbird is fully featured, and may be a perfectly suitable email client for you. Consider trying it. If, like me, you still want to use Outlook, continue on.
- Download and install Davmail. Accept all of the default configuration settings. Since Office 365 is apparently the most commonly used exchange system, DavMail pre-populates the correct exchange url. Your davmail configuration screen should look like this:
(Obscured url: https://outlook.office365.com/EWS/Exchange.asmx)
Open Outlook. Remove your existing Office 365 exchange account if necessary, and restart Outlook. Additionally, using any Office suite application, log out of Office 365 (File > Account > Sign Out). Close all Office applications, and then start Outlook again.
Click File, then add account. Select Manual Setup, or additional server types. Fill in the settings as shown below (note that the inbound and outbound servers are both 'localhost'), then click More Settings.
- Click the 'Outgoing Server' tab, then check the "My outgoing server (SMTP) requires authentication". Leave "Use the same settings as my incoming server" selected.
- Click the 'Advanced' tab. For Incoming Server, enter port 1143. For outgoing server, enter port 1025. Ensure that the encryption setting remains on 'none' for both servers. Don't worry, these unencrypted connections are only used locally.
Click Ok, and then Next. Your email should begin to sync with the server via IMAP. This may take a while if you have a lot of email.
Now we need to set up your calendar. This presents a minor problem, as Outlook does not natively support the CalDav protocol used by DavMail. Fortunately, a well-maintained plugin for Outlook exists to solve this problem. Download the Outlook CalDav Synchronizer Plugin. Install the plugin, then restart Outlook.
A new ribbon entry should appear, entitled "CalDav Synchronizer". Click this tab, then 'Synchronization Profiles'. Click the green plus sign to create a new profile. Enter a name for the profile, then select an Outlook Folder - you may simply create a new folder named 'Calendar', as shown below. If you have multiple accounts set up in Outlook, make sure your folder is under the correct one.
Afterwards, fill in the DAV url, replacing your own email address:
Then fill in your username (your email address), your password, and, again, your email address. You may also wish to decrease the calendar synchronization interval from its default of 30 minutes. When you're finished, your screen should look like this:
Click OK. You should now be able to see your calendar by clicking on the folder you created in step 8. It may take several minutes for calendar entries to appear the first time. It may also be necessary to restart outlook one last time for the calendar to appear in its traditional location, viewed by the 'calendar' button.
Having completed these steps, your copy of Outlook should be in the following state:
- Capable of sending/receiving email using your Office 365 address (via IMAP)
- Capable of sending/accepting meeting invitations and interacting with the calendar in a normal way (via CalDav)
- Outlook & Office should -not- be signed in to any account whatsoever.
Further, it is now possible to enable the "Don't allow Office sign-ins" group policy without impacting this email account and calendar.
If anyone has further suggestions or ways to improve/simplify this procedure, I welcome the input.