Just had to setup MS Outlook 2016 on a Mac, and wanted a smart folder (aka saved search) that shows only emails that are either unread or flagged.
To do this, click into the search box in top right of the Outlook window. The search toolbar will appear, select Advanced.
The raw query to use is:
(com_microsoft_outlook_flagged = 1) || (com_microsoft_outlook_unread!=0)
Then save the search.