Modern versions of Outlook are so sure that you want to connect to Office 365 that they try to setup an Office 365 account even if you tell them no to and even if you already have them configured to an on-premise Exchange server. This causes problems if your domain is registered with Microsoft for any reason (like using one of their other hosted products) and you connection to the local Exchange server fails for any reason, even temporarily (like rebooting the Exchange server, or a glitchy internet connection).

It turns out there is a little-known way to disable this little-known behavior in Outlook as disclosed by Gotham Web. It involves adding the following registry keys to the client machines.

HKEY_CURRENT_USER\SOFTWARE\Microsoft\office\16.0\outlook\autodiscover
DWORD: ExcludeExplicitO365Endpoint
Value = 1

HKEY_CURRENT_USER\SOFTWARE\Policies\Microsoft\office\16.0\outlook\autodiscover
DWORD: ExcludeExplicitO365Endpoint
Value = 1

Note that the version of Outlook, in this case 16.0 must match what you have installed.