1. Have you updated to the latest version? I changed some things related to the text mesh automatically redrawing when the RectTransform is changed in a recent version, so I'm wondering if this is a side-effect... does disabling "autoRead" (under the timing foldout) produce a differet result?
2. At first it looks like just how the Universal outline shader renders when the outline width is too far, (that shader only does an 8-pass outline) but the outline being thinner than the text on that shader is something I haven't seen... What version of Unity is this? Additionally, try out the "Ultra" shader, that's where I've been putting more work into prettier outlines, recently!