Yep, it's been like that for many years. Well before the pandemic. First noticed when it started triggering our automated incident response systems. Everything is proxied through distributed MSFT proxies.

As far as I know, there is no way to turn it off and "regular" functionality doesn't even exist in the mobile apps anymore. The Outlook mobile app itself is a basic proxy client. I believe the new Outlook is now, or is in the process of becoming the same.