Sharing two links from the MS forum on the folder pane width issue; seems an increasing number of users is complaining:

Folder pane width can't be change
Hello, I was able to slide the folder pane to the left, making it smaller but it doesn't work anymore in the new version of outlook, and the space between the folder pane and the message list suddenly
answers.microsoft.com

Outlook - Folder Pane Width
I want to make the width of my folder pane in Outlook smaller. The folder pane seems to have a minimum width which cannot be changed. I tried dragging the folder pane using the two parallel lines to
answers.microsoft.com