(default) PSTs can be added | No PSTs can be added | Only Sharing-Exclusive PSTs can be added:
RegKey: DisablePST (Values: 0,1,2)
By default, users can add PSTs to their Outlook profiles and can use Sharing-Exclusive PSTs for storing SharePoint Lists and Internet Calendars. You can use this setting to limit users' ability to store mail in a decentralized fashion. You can block the use of PSTs completely, but be aware that blocking all PSTs disables Outlook features such as SharePoint Lists and Internet Calendar.\n\nIf instead you allow only Sharing-Exclusive PSTs to be added to user profiles, PST usage is still limited but the Outlook features that rely on special PSTs are not disabled. The setting that allows Sharing-Exclusive PSTs to be added blocks users from creating new folders in the Sharing-Exclusive PST; copying existing mail folders from their default store to the PST; and copying individual mail items to the root of the PST.
I set this to "Only Sharing-Exclusive PSTs can be added". I can then setup Vault Cache, sync etc and it actually seems to work.