Managing personal Outlook.com account settings, security, and privacy
Hi, @Namjies
Thanks for the screenshots. They show that the tracking pixel in that junk email uses an image link starting with just "//" instead of "https://". Outlook on the web flags it as a broken link, but the browser still loads it directly from the spammer's site. That means it skips both your block setting and the image proxy. There's no other setting that controls this, so it looks like a bug on Microsoft's side.
Here are some suggestions you can try:
Report it from inside Outlook.com by clicking Help > Feedback and attaching the same screenshots. The Outlook team needs to fix how the junk folder handles these links, so specific reports like yours help.
Until it's fixed, don't open junk emails in the browser. Go to Settings > Mail > Layout > Reading pane and choose Hide reading pane. Then you can tick the checkboxes and delete junk mail without opening anything. You can also right-click the Junk Email folder and pick Empty folder. A tracking pixel only loads when the message is actually opened.
If you need to look at junk mail, use the Outlook mobile app with Block external images turned on. That setting stops tracking images from loading in the reading pane on mobile. In classic Outlook for desktop, junk messages open as plain text, so tracking pixels can't load there either.
Your setting is still working in the inbox, so you shouldn't need to change anything there.