When this problem occurs it is often related to the fact that the MDaemon Connector account has been added to an existing Outlook mail profile rather than a brand new one. Due to this a Personal Folders tree still exists (or is a cached reference in the profile) and is being partially used by Outlook and is causing issues.
The way to resolve this is to ensure that the MDaemon Connector is used in its own profile and is the first account added to that profile:
1. Open the Windows Control Panel and choose Mail.
2. Choose Show Profiles.
3. Choose ‘Add’ and create a new uniquely named Profile (for Example: MDaemon Connector)
4. Run through the Outlook wizard to add an email account to this profile and ensure you select the option for “MDaemon Connector” as the account type (typically under ‘Other’ or ‘Additional Server Types’) when prompted.
5. In the Windows Control Panel under Mail -> Show Profiles -> ‘When starting Microsoft Office Outlook, use this profile:’ -> “Always use this profile” select the new profile you’ve created so that Outlook will automatically start in it when you open it.
When you open the new profile all your existing Email, Calendar, Contacts, Tasks, etc will be pulled into the new profile but you’ll find the old Personal Folders tree no longer exists (Outlook Connector doesn’t use or need one).