The last step that worked for me was to Run the office 365 setup for current Windows user profile. 
Office / outlook was already installed on this machine for more than a year and current user was using it n never had any issue. I tried run repair but that did not make any difference. But running office 365 setup again resolved the issue. Not sure if that was something with registry.

Previously I tried changing QB compatibility setting, resetting Default email client as Outlook, running QB + MS office + Windows update, Repair IMAP,l.

I tested sending email from QuickBooks after each step.