Recently while configuring outlook for our client, we got the above mentioned error. Also strangely it was working prior to one of our deployments that we did in the organization. So we became pretty sure that it has something to do specific with our latest customizations that we deployed to the environment.
What we did is we compared all the changes that we made in the recent deployment, specifically the Enum fields, since the error says that it cannot parse the Enum value.
What we found is that, the “searchable” property of the field “importsequencenumber” of one of the custom entities has been changed to “No”. We set it to “Yes” and published the customizations.
After that we re-opened outlook and tried to configure the Outlook client and all worked well much to our joy.
Hope this helps and saves you some time when you face similar issue.