You will want to review your SMTP logs to see if you can find the 550 referenced, you may find more information within the logs. SmarterMail does not have a mechanism to issue a 550 for just an isolated server so there may be something else occurring here. If it's working for other servers there is absolutely no reason it would not work for Outlook.com
I'm wondering if Outlook.com may be reaching out to the incorrect server. If you do not see the 550's referenced in your SmarterMail logs from the Outlook.com servers this may be the scenario you are running into.
Technical Support Supervisor