My bank isn't end to end encrypted either, but that doesn't mean it's suddenly ok for Microsoft (or any other company) to suddenly start MITMing my online banking connections.

I am talking about the fact that the new default email client on Windows will hand over all your email credentials to Microsoft. This has nothing to do with Gmail.

I think the concern is that it copies the emails of your non-Microsoft accounts that you added to the Outlook app, over to Microsoft servers

Adding a bunch of middlemen that also see the data increases the risk.