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Exchange hybrid - Users with on-prem mailboxes are being considered 'unauthenticated'
Overview + Setup Information This issue relates to Exchange, SharePoint Online and Office 365. Here's a quick summary of our setup: We've integrated our on-prem AD with Azure AD via Azure AD...
Moreover those messages are sent from the SPO backend, so Exchange is not even involved. Have you tried allowing just the no-reply@sharepointonline.com address?
The quick answer is...you can't. Exchange Online users are not authenticated on premise, the email originates from Exchange online which is essentially a federated organisation. Maybe MS could implement a separate tick box for "federated partners" but this is unlikely to happen.
That is indeed unlikely to happen. Thanks for pointing that out anyway, hopefully there's another workaround.