Hi,
Yes, you can. The proper way of doing this is to add Office 365 URLs which you want to be ignored as URLs for which Fiddler should be bypassed.
In order to do that go to Tools -> Options -> Connections. You will find a text box with label "Bypass Fiddler for URLs that start with" in the bottom right corner. This is a semicolon delimited list of URLs (and the default <-loopback> token) and support * as a wildcard. Based on my testing it seems that you have to add "*.office365.com", but I would suggest to confirm that this is the URL before adding it.
Please, keep in mind that this textbox actually controls Windows WinINET settings (you can check them by Tools -> WinINET options) and in order to take effect you have to detach and reattach Fiddler (File -> Capture traffic or F12).
Regards,
Alexander
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