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Unfortunately, after 180 days of inactivity, your Hotmail account has been purged from the Microsoft server.
Since email addresses are never recycled, it will show that the email address taken but it will not be able to be recovered or signed into anymore.
I completely understand your frustration and please understand that I am only the messenger in this situation. Google does not delete your email address after X days of inactivity anymore which I believe is a lot better system but Microsoft is still purging accounts after 180 days. I really wish I had better news for you.
If you have any questions, please let me know otherwise if you can take a minute and use the rating system to rate our session as 5 stars and press Submit so I am credited with helping you.
I am checking back up on you about your issue. If the issue is resolved or you do not need anymore help, please rate our session as 5 stars and press Submit so I am credited with helping you otherwise please reply back so we can continue with the issue.