It's not that simple. It used to have a more capable renderer, they rolled it back to the Word one (no animated GIFs!) and have since upgraded again. So Outlook 2007-2016 is really crappy, versions before and after that, a bit less so.

The lovely world of enterprise software.

Your use of the word "still" is a little misleading. IE _was_ the default email rendering engine until 2007 when Microsoft made the inexplicable decision to move to Word 2007 instead.

My theory is still that it was about using Word as a component to write replies. However, if they delayed the HTML->Word conversion to that point, everyone would complain to MS "Reply is broken!"

By using Word as a viewer the email is broken right on delivery and users now complain "The email you sent me is broken!"

At least it's still better than Notes

Outlook is part of Office; Word is part of Office.

IE, and now Edge, is a different business unit.

Not inexplicable at all. NIH doesn't only apply at corporate boundaries.