As others have stated; when SMTP Forwarding is enabled with leave copy enabled on a mailbox and an Anti-Spam policy has Auto Forwarding set to Off, internal SENDERS are sent an NDR and NOT the person with the forward. This is extremely confusing to the internal sender and doesn't let the rule creator know that it was blocked.
For example:
Person 1 - Internal User
Person 2 - Internal User with forwarding to external address
Person 3 - External user
Person 1 -> Person 2 = Person 1 gets the NDR. Person 2 doesn't get the NDR but gets the original message.
Delivery has failed to these recipients or groups:
Person1 at internal.com
Your message wasn't delivered because the recipient's email provider rejected it.
Diagnostic information for administrators:
Generating server: 123abc.PROD.OUTLOOK.COM
mailto:email address removed for privacy reasons
Remote Server returned '550 5.7.520 Access denied, Your organization does not allow external forwarding. Please contact your administrator for further assistance. AS(7550)'
Person 3 -> Person 2 = Person 2 gets the NDR and message but the NDR says the email failed to Person 2 and no mention of the forwarding address
Delivery has failed to these recipients or groups:
mailto:email address removed for privacy reasonsYour message wasn't delivered because the recipient's email provider rejected it.
Diagnostic information for administrators:
Generating server: 123abc1.PROD.OUTLOOK.COM
email address removed for privacy reasons
Remote Server returned '550 5.7.520 Access denied, Your organization does not allow external forwarding. Please contact your administrator for further assistance. AS(7550)'
Because of this we've removed the Outbound Anti-Spam policy. What we have done is:
1. Removed the Forwarding option on Outlook on the Web via RBAC
2. Mail Flow rule to stop Outlook Rules from forwarding externally which let's the rule creator know the action is not allowed.
3. Scheduled script that removes any SMTP Forward that exists.