While it's uploading the file I got a window that locked up Outlook to where I couldn't do anything else while it was uploading. I'm thinking this shouldn't be the case.
What window were you seeing when Outlook was locked up? What version of Outlook are you using?
I just tested with Outlook 2013 and didn't see anything that blocked my ability to type into the current message or even start a new one.
It occurs after it looks like the little bar finishes. If I close out of it, It cancels the upload and attaches it instead. Uploading a 23MB zip file. Didn't occur with a PDF file I tried.
Running Outlook 2013 (15.0.4675.1003) MSO (15.4.4675.1002) 64-bit Part of Microsoft Office 365 ProPlus
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