I confirmed the error. The login fails if Chrome is minimized. I think the culprit is the hotmail website itself. It probably uses Javascript to check if the browser is in front (for security and to prevent automation?).
As workaround I tried disabling Javascript (Chrome://settings/content/javascript) but then the Hotmail login does not work at all.
If you still want to use Chrome, I recommend to run the automation in a small Linux virtual machine that remains unlocked. The VM itself can be minimized then, and/or the host PC screen can be locked.