After extensive testing and confirming that neither 'Trust Center' settings nor 'Whitelisting' scripts solved the issue, I found the root cause:
The iCloud Form Region (the custom UI layer Apple injects into the Appointment window) contains code/ActiveX controls that trigger modern Outlook security blocks.
The Solution (Workaround): Instead of fighting the security block, you can simply disable the visual Form Region in the Registry. This forces Outlook to use its native/standard Appointment window (which loads instantly and safely) while keeping the iCloud Synchronization engine fully active in the background.
Steps to fix:
Close Outlook.
Open Registry Editor (regedit).
Navigate to the Form Regions key. Depending on your Windows/Office version (32-bit vs 64-bit), check both locations:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Office\Outlook\FormRegions\IPM.Appointment
HKEY_LOCAL_MACHINE\SOFTWARE\WOW6432Node\Microsoft\Office\Outlook\FormRegions\IPM.Appointment
Look for the key/value named Apple.DAV.Appointment.
Rename it to _Apple.DAV.Appointment (adding the underscore hides it from Outlook).
Restart Outlook.
Result:
No more 'Malicious Code' error when opening/creating iCloud appointments.
The window opens instantly (Native Outlook UI).
Synchronization to iPhone/iPad works perfectly.
Note: A future update of the iCloud for Windows app might recreate these keys. If the error returns, simply rename them again.