Hi,
I opened a ticket with Microsoft. They came up with the following response:
"Issue is not from flow end, it is because of the latest version of desktop outlook client which is having problem. We have filed a work item for this from our end to improve the service but as of now there is no ETA for this.
You can also rollback to the previous version of desktop client that will help you in this scenario."
The version of outlook that we are using is
Microsoft Outlook for Microsoft 365 MSO (16.0.12730.20144) 32-bit
Thanks,
Mk