I just did a basic test here and it seemed to work as expected. I'm running 14.53 firmware on an MX65W, I went to Security & SD-WAN/Content Filtering, then added Web based email to the list of Blocked website categories. I waited a few minutes, then tried to access Outlook and it was blocked. The block page showed that I was trying to access http://outlook.office365.com/, so I added outlook.office365.com to the "Allow list URL patterns", waited a few minutes, and I was able to access Outlook.
I would check the "Allow list URL patterns" to make sure they are just plain domain/host names, one thing that tripped me up when I started working with Meraki was that my predecessor had used Content Filtering to block Netflix (not as a category, but specifically in the Blocked URL list) and they had put in "*.netflix.com" instead of just "netflix.com", so it wasn't actually being blocked.
One thing I wasn't 100% clear on in your message, are you using the web based Outlook 365 client or the desktop Outlook 365 client? I did my testing with the web based client, so the results might be different with the desktop client.