People column

I have a People column in a basic list.  Is there a restriction on which people show up?  We are working on a solution for former employees that are still in Azure AD/AD, but whose sign-ins have been blocked.  NONE of those users seem to show up in my list even tho they are still listed as active users in M365 admin and AAD.  Note that I can do a search in SharePoint and find the user profile information.

If there is a restriction, does anyone know how to get around it?