Hi @Jacob Zhang ,
Thanks for reaching out.
I understand you are trying to authenticate using external user account, outlook.com to your registered application and getting the error "AADSTS50020: User account 'user@harsh.com .com' from identity provider 'live.com' does not exist in tenant 'Default Directory".
As mentioned by @ MohammedAltamashKhan-3285, you need to invite that outlook account as guest user in your organization to access the application.
Azure AD allow you to access External Identities by invite the users as guest users to collaborate with your organization. A invitation and redemption process allow external users to use their own credentials to access your company's resources.
Reference: https://learn.microsoft.com/en-us/azure/active-directory/external-identities/what-is-b2b
Also as you mentioned, you don't want to invite users and allow all the users to access your application, then you need to add self service sign up user flow where user need to sign up for an application which create users as guest users to access the application.
Hope this will help.
Thanks,
Shweta