Sending, receiving, and organizing email in Outlook.com
Hello
If there has been inactivity during the last two years and the sign in error indicates that the account doesn't exist, it is unfortunately closed permanently and cannot be recovered. Microsoft's account activity policy is explained here: https://support.microsoft.com/topic/microsoft-account-activity-policy-7c0a9fa7-0982-b7c6-fd72-df852b63699f
Microsoft preserves every single outlook.com/hotmail.com address and doesn't allow reuse, hence, when you try to create a new account with the same username, it will not allow you and gives you the "already taken/exists" message.
I am sorry. Wish I had something better to share..