Microsoft confirms Outlook mail forward, categorize, flag "operation failed" error

A few days ago, Microsoft released a workaround for a major Outlook bug. The bug would prevent a user from forwarding, categorizing, or flagging a message in their Outlook mailbox when operating in the online mode leading to an "operation failed" error. Microsoft notes that the problem occurs when a message is marked as "Record" from within Retention Policy or File Plan. It says:

ISSUE

When you access a mailbox in Online Mode and attempt to forward, categorize, or flag a message you may see the error “The operation failed”. This issue can occur if that message has been assigned a label from a Retention Policy or File Plan that is configured to mark items as Record. In this case, Outlook will fail to perform the operations and will display an error message.

Microsoft has also provided guidance for admins so that issue can be confirmed. It explains:

TROUBLESHOOTING

To ensure that the issue is caused by the record, admins can run a Network Trace while reproducing the issue. This should result in the following exception being received from the server:

Microsoft.Exchange.Data.StoreObjects.StoragePermanentException: Record label on the item cannot be moved to archive mailbox and the message metadata cannot be updated

From the Microsoft Purview Portal, admins can also check if the Retention Policy that is applied to the message is configured to mark items as record.

Please keep in mind that the issue may not be observed for all the messages that are marked as record.

Finally, a couple of workaround have been provided, and they are pretty basic ones. Microsoft has recommended that users switch their account settings to Cached mode, or use Outlook on the Web instead of the desktop. Another way is disable the reading pane and forward a mail without opening or previewing it.

STATUS: WORKAROUND

As a workaround, users have the option to switch their account settings to use Cached Mode or utilize Outlook on the Web.

Additionally, users can also Turn Off the Reading Pane and forward the message without opening or previewing it.

You can find more details on Microsoft's support article regarding this issue.