If yes, would updates made in Outlook automatically sync to the Confluence Team Calendar?
If it can be done, how? I've searched all through the Confluence documentation and can embed a Team Calendar in Outlook (non-editable), but not the other way around.
There is no bi-direction sync available. You can sync Team Calendars one way only.
For instance in your use-case:
Please note, ANY Cloud-based calendar should be able to offer a subscription URL. I can't really provide a guide on each and every piece of software you use and neither can Atlassian I would say.
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