If you have enabled the ‘Flagged email’ option from settings in To Do, then any email you flag in Outlook will show up under the ‘Flagged email’ smartlist.
From the Outlook web app, you can create a task out of an email by right-clicking —> Advanced actions —> Create task. You can also select a message in the body of an email and create a task out of it.
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"Open in Outlook" should be able to open flagged emails in desktop Outlook application, not online application. Or make an option to choose which application to use.
It's really frustrating when working all day in desktop Outlook and desktop To Do application, but emails opened in online web view - why?