Thanks for the logs. I've checked them and everything looks fine from our (MfE) side, looks like you got a security bug. They are notified about this issue. Moreover, I've checked our bugzilla and it seems to be fixed in PR1.2. NOTE: This one seems to be the security issue too.
Explanation is quite easy. Hotmail uses Exchange with a protocol version 2.5 and it is not supported downloading of the HTML text (so we are fetching only plain text). There is a workaround to download full message's MIME, but I'm not 100% sure that it will work fine and will not break anything. So, need to test it at first. Thanks for pointing me on a useful user feedback
And once again. Calendar guys are aware about this issue. Btw, as I can see (on my Gmail) all invites got this part in the email: "Content-Type: text/calendar; charset="utf-8"; method=REQUEST", so... looks fine for me .
P.S. We have a really long the Happy New Year holidays in Russia, so I can disappear on a long period of time again quite soon