Using classic Outlook for Windows in business environments
Hi JamesSec@LCF
Thank you for reaching out to Microsoft Q&A forum and sharing the details and for the thorough troubleshooting.
Based on everything you’ve tested, I would like to share some information from my side that I hope will be helpful in showing that there is no misconfiguration on your end.
What you’re seeing is a known limitation when using Teams with on-premises Exchange mailboxes. You can see detailed information here: Resolve interaction issues between Teams and Exchange Server - Microsoft Teams | Microsoft Learn
When User 1 clicks Teams Meeting while creating an appointment directly on User 2’s calendar, Teams treats User 2 as the meeting organizer. Creating a Teams meeting on a delegated or shared calendar requires the organizer’s mailbox to be hosted in Exchange Online.
User 1 is able to create Teams meetings on their own calendar, but the same action fails when attempted on any other user’s calendar. In those cases, Outlook displays the error message "make sure you’re signed in to Teams" even though Teams sign‑in is already working.
However, I also found this workaround you can consider that User 1 can create the Teams meeting on their own calendar and invites User 2 > User 2 creates the Teams meeting themselves; delegates can edit it afterward > Move the organizer mailbox(s) to Exchange Online, where delegated Teams scheduling is supported.
For your information, here are some articles you can see:
How Exchange and Microsoft Teams interact - Microsoft Teams | Microsoft Learn
I hope these suggestions provide some helpful.
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