Teams external users with Teams accounts not managed by an organization...

TSBenz i agree that microsoft is definitely not clear on this and the settings are kind of odd, but i don't think this is a bug, your screenshot shows that you have the "Teams and Skype for Business users in external organizations" setting to block.  that setting states the following

• Block all external domains - Prevents users in your organization from finding, calling, chatting, and setting up meetings with people external to your organization in any domain.

https://learn.microsoft.com/en-US/microsoftteams/trusted-organizations-external-meetings-chat?WT.mc_id=TeamsAdminCenterCSH&tabs=organization-settings#allow-or-block-domains

so i would think you have a superseding deny rule that is preventing external users from chatting with you.

I wish they would just have a "let your users call, chat and have meetings, but block the unsolicited spam chats from coming inbound."  i don't understand why the "External users with Teams accounts not managed by an organization can contact users in my organization" checkbox has the "not managed by an organization" in it.  i guess they need to ensure that someone can initiate a chat, but wouldn't it be nice if they could separate the "can initiate a chat" with "can initiate a meeting"

anyway, i know this is old, but i stumbled across it trying to stop the new spam we are seeing coming by way Teams chat.