Managing personal Outlook.com account settings, security, and privacy
Hello,
Outlook error 500 usually happens because of a corrupted cache and cookies stored in your web browser. This may conflict with the Outlook servers, and you may encounter this issue. To resolve this, first try signing in with your Microsoft Outlook account in an InPrivate (Incognito) window. See if you can sign in normally there.
If it works, clear your browsing history, cache, and cookies (All time), then log in to your account.
In some cases, switching to a different web browser or network, such as mobile data, may also help.
So, let me know if you can sign in with your @hotmail.com account on the Outlook web. This will help me to determine whether the issue is with your Account itself or with the device/app you're trying to add your account.