If you mean a Microsoft "To Do"…
I tried using the setting at the Outlook web portal to create a To Do from an email that has been flagged. It worked for emails I flagged using Mail on a Mac but wouldn't work for emails flagged with the Mail app on my iPhone…even though I can see those flags everywhere (I don't know if there's a lag or not).
It could be that my iPhone's Office 365 is set up as IMAP and not Exchange but I haven't tested that. I'm leaving it as IMAP as you can't move mails from one account to another properly unless they're all IMAP.
If your email account is set up as Exchange on your iOS devices and the flagging setting still doesn't work for iOS Mail I suggest using the Outlook app for iOS. You can create a To Do from an email easily on that…no flagging required.