When use condition formatting in outlook, we cannot use the custom crm field if the name is already used by outlook field. The outlook field take priority over the crm field.
For example:-
We have created a custom field "priority" in Contact entity (or any entity) in CRM. This field is option set which has 2 values: standard and high.
When go to outlook CRM client, go to list of records for the entity that added Priority field to.
On the View tab of the ribbon click on 'View Settings' button. Select Conditional Formatting option.
Then click Add button and give name to rule, e.g CRM
Click on Condition button.
On Advanced tab use Field drop down to select 'Priority' field from 'User-defined fields in folder'.
There are 4 conditions listed: equals, not equal to, exists, does not exist
Leave the condition as 'equals'
Note that the options in the Value list are 'High', 'Medium', 'Low' and not the values we chose when defining the field.

If we check at the Field >> "All Task Fields" >>there is the "priority" field exists
Since this field does already exist in the system, this system 'priority' is selected instead of the custom 'priority' field in CRM

The workaround is that we have to rename the entity to be different from the outlook field.
However, I would suggest that the outlook field should be renamed to something else or any machnism that allow us to use perferctly custom name as we wish.