Whenever you change Regional & Time settings in OWA to change the Language for default folders you get this error:
"The localization operation of the default folders of mailbox"
Reason for this error :
Consider I want to change it to Nederlands Language which is Dutch & for some reason (Could be Old mails imports) or manual creation I have another folder called "Postvak In" means "Inbox"
So If I change the Language to Dutch(nl.NL) office365 server tries to change the folder named Inbox, Since there is another folder with the same name it errors out as above.
Locate the Default Folder which has the language of the one you trying to change & Re-name it.