I went to both Outlook and Teams to check and I have the option to select both "(UTC) Universal Coordinated Time" and "(UTC+0) Dublin, Edinburgh, Lisbon, London", with the later adapting to changes in the summer; but I do agree it's clunkier than the Olson database, combining multiple regions in a single option while splitting regions with the same timezone rules into different ones.
This is factually wrong already. In summer, London is not UTC+0. They mean "UTC+0 ignoring DST", but that is not useful. If they're going to be specific by specifying a UTC offset, what's the point if it doesn't include DST? How is that useful as an identifier when it's ambiguous? With their history of getting it wrong, this just introduces doubt about its correctness.
Further, if you ask Outlook to show you two timezones at once and do not override labels, it will label BST "UTC+0" (it isn't; it's UTC+1!) while also calling eg. India "UTC+5:30", implying a time difference of 5.5 hours when it is actually 4.5 hours. This isn't just a case of "ah - they actually mean ..."; it's most definitely wrong!
The problem is that it has a very US-centric view of what DST is. You can mostly ignore it in the US when calculating time zones because the entire country changes DST at the same time. This is not the case internationally.
This is how 99% of people interpret it
It's not ambiguous as you imply.
Summer time is not the default time
I don't know enough about the India case to know how/why it's wrong though
Your TZ doesn't change between summer and winter. What changes is the shift
I literally didn't see anybody getting confused with this in any country (yes, including Ireland) with summer time.
But some people think they're too smart when they nitpick about minor issues
My TZ is GMT in winter and BST in summer. I am not in GMT in summer. GMT continues to exist in summer, doesn't shift but my clock doesn't follow it.
The UTC "shift" changes indeed. When I am DST-shifted, calling me "UTC" is absolutely wrong.
The practical issue is that people still use "UTC" and "GMT" interchangeably, which is roughly correct anyway since they remain the same in practice. But then during summer when someone says GMT I don't know if they actually mean BST (they mean my local time) or UTC (they mean the global point of reference). That ambiguity only arises because Outlook (and you, apparently) conflate GMT and BST. It's far more of a problem for those actually living in a UTC-adjacent time zone (do you?), especially because being only one hour off, usually both options seem equally likely in context.