Your Open with → Choose another app → Outlook (new) → Always workaround is the correct immediate fix because it rewrites the .msg association used by File Explorer, even when Windows Settings already displays New Outlook as the default.
Microsoft documents that New Outlook supports opening .msg files by double-click, right-click, or drag-and-drop. If double-click fails, its guidance is to reset the default application for that file type.^1^
Per-user resolution
For each affected user:
- Exit New Outlook.
- Right-click any
.msg file in File Explorer.
- Select Open with → Choose another app.
- Select Outlook (new).
- Select Always.
- Double-click a different
.msg file and verify that it opens.
Selecting Open with → Outlook (new) without choosing Always only opens that individual file; it does not rebuild the persistent association. That matches your observation exactly.
Organization-wide configuration
If this begins affecting more users or newly provisioned devices, deploy a Windows default-app association for .msg. Microsoft documents this New Outlook association:^2^
<DefaultAssociations>
<Association
Identifier=".msg"
ProgId="AppXtked0qbwdp1v44z1p7ts8bc7kkwea1mh"
ApplicationName="Outlook" />
</DefaultAssociations>
Import or deploy that XML through your normal Windows default-application association policy. Test it against your managed Windows build first, particularly if Classic Outlook is also installed.
What the error does—and does not—mean
The message claiming that New Outlook “doesn't currently support this action” is misleading in this scenario. .msg opening is a documented New Outlook feature, although .msg and .oft files require an account with a qualifying Microsoft 365 subscription.^1^
No entry on Microsoft’s current New Outlook known-issues page identifies this exact recent .msg double-click regression.^3^ Therefore, the available evidence supports treating this as a file-association failure rather than a confirmed service incident or removal of .msg support.
If resetting the association stops working
Use these fallbacks in order:
- Open New Outlook and drag the
.msg file onto its reading pane; Microsoft documents this as a supported opening method.^1^
- Temporarily associate
.msg with Outlook (classic/desktop) if installed.
- Capture the New Outlook version, Windows build, timestamp, and whether both Outlook clients are installed, then open a Microsoft 365 support case. Include that explicit Open with → Outlook (new) succeeds while double-click fails until Always is selected; that distinction isolates the Explorer association path.
References
- Open .eml, .msg, and .oft files in new Outlook and Outlook on the web | Microsoft Support
- Start new users in new Outlook
- Fixes or workarounds for recent issues in new Outlook for Windows ...