Looks like Microsoft have just released version 4.2240.4 of the Outlook App to the Play Store and this might have resolved it.
One of our users has reported that they can now go back into Security Settings on their device and change their PIN back to 6 Digits (which matches our policy) vs the 8 Digit PIN they were made to set earlier.
Might be worth getting some of your impacted users to try the same or at least download the update and see if the prompt goes away.