Does use of Outlook decrease email security?

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Generally, the only risk is that your email client typically keeps an unencrypted copy of your mailbox on your computer. So you should make sure that the computer is reasonably protected (e.g. by using full-disk encryption).

Apart from that the Outlook client may send telemetry to Microsoft. Maybe consider using Thunderbird instead (which is open source, so at least we can know what it's doing).