Hi,
According to the description, I found that 500 error occur when send to Hotmail account. Please correct me if there is any misunderstanding.
This issue seems related to the Hotmail account. Please apply a new Hotmail account for testing.
Also try to send to Gmail or other email accounts to verify whether the same issue existed.
If this issue only occur in Hotmail account, I suggest following mail.live.com (Link that Keith provided) troubleshooting to check the error.
Thanks
Mavis
Mavis Huang
TechNet Community Support
