and Outlook and OneDrive and …

Customers started reporting that were weren’t able to use Outlook or Teams, and OneDrive failed to sync.

Seems to be caused by the Zscaler Client, in dot point:

• Zscaler is using/relying on localhost loopback.
• “something” is overfilling the loopback exemption list, which causes list lookups to fail

The Zscaler Proxy Service and the PAC File are on loopback interfaces, so when the list lookup fails, it breaks everything else on the list.

Including microsoft.aad.brokerplugin.

The workaround
Adding any application to the exemption list causes the whole list to be revalidated.  So executing this command:
checknetisolation LoopbackExempt -a -n=‘microsoft.aad.brokerplugin_cw5n1h2txyewy’
would do that.

The fix?!?
Zscaler Client v3.0.2 contains a fix for this issue.

References:
Microsoft – communicating with localhost (loopback)
Zscaler forum – Periodic Issues Connecting to O365 with Teams and Outlook clients