User Configuration > Administrative Templates > Microsoft Word 2016 > Word Options > Advanced > E-mail Options
User
HKCU\software\policies\microsoft\office\16.0\common\mailsettings
This policy setting allows you to specify default quality of compression done on inlined images in Outlook. If you enable this policy setting, Outlook would compress the inlined images in the message as per the specified quality. If you disable or don't configure this policy setting, inlined images would be compressed at the default quality (220 dpi). Note: This policy setting only applies to subscription versions of Office, such as Microsoft 365 Apps for enterprise.