I've seen several posts on this subject and I seem to have all the same symptoms.  Originally only a few contacts showed up on the phone, then I configured the "view by" settings the same (last name first, sort by last name), deleted and reinstalled the account.  The contacts came in once, but are not updated.  When I do a manual sync nothing changes.

Several other anomalies exist.  To name a couple

1. When I go to the manual sync settings and select "sync now" the last sync date/time updates.  But when I go to the detailed setting for the contacts it shows a last sync date of a week ago.

2. The server name that I enter (as prescribed on the outlook.com help (s.outlook.com) changes after I exit settings and re-enter to "bay-m.hotmail.com"

I references to private replies and account setting changes.  Please help.