Outlook Integration 'Log Email on Send' creates a Task not an Email Message

To resolve the issue, follow the below steps:
 

• Disable "Don't allow HTML uploads as attachments or document records" setup perm.

1. Log in to Salesforce as System Administrator (Classic or Lightning Experience)
2. Navigate to Setup | File Upload and Download Security
3. Edit and Uncheck/Disable "Don't allow HTML uploads as attachments or document records" option
4. Click 'Save' to save the changes
5. Restart Outlook and test Log Email on Send again as needed.
 

If the issue still exists, proceed to below steps:
 

• Use Registry Editor to change the "Send Pictures With Document" registry key.  

Note: Be careful when editing the registry, as it is easy to harm your computer or programs you use if you are not sure what you are doing or make an error. Be sure to always back-up your registry before applying any changes.

1. As administrator on the local machine, open the Registry Editor press the Win(key) + R key combination on your keyboard and type in REGEDIT in the Run box to open the Registry Editor.

2. When the Registry editor loads navigate to: HKEY_CURRENT_USER\Software\Microsoft\Office\X\Outlook\Options\Mail. Where X would be the version of Outlook either 16.0 or 13.0

3. Double-click the value Send Pictures With Document that shows in the right side pane.

4. When the value loads change its Value Data from 1 to 0 and click OK. 

5. Close the registry editor.

6. Restart Outlook and test Log Email on Send again as needed.

Changing this value should not affect any images added to Emails or included in the Outlook Signature created with the Outlook Signature Editor. If images in signatures are created outside of the Outlook Signature Editor ensure they are linked images on an accessible web server.