In our tenant, we have two verified domains. Our main domain—let's call it Domain 1—has its DNS pointing to Microsoft, so all mailboxes reside in Microsoft's server. Our second domain—Domain 2— is verified in the tenant, but their DNS do NOT point to Microsoft. This domain is hosted by GoDaddy and that's where the mailboxes reside and it is set up as an internal relay domain in the Exchange admin center.
We have several users in our tenant with this domain (Domain 2). These users are licensed for Teams and other services, but the Exchange license and app have been deactivated, so no mailbox is provisioned for them.
We're experiencing a problem with one of these users, I'll call it User 0 (remember this user does not have a mailbox provisioned, as the DNS for this domain do not point to Microsoft's server):
Whenever a user in Domain 1 sends an email to User 0 and they copy another user also in Domain 1, this first email goes through to every recipient, including User 0, but the recipients in Domain 1 see a long, weird string (see image below) as User 0 email address.
When they reply to this email, they get a NDR because of this.
Does anyone have any idea of what might be happening? I've been on the phone with several Microsoft ambassadors about this issue and none of them have been able to figure out what's happening. The last time we set up a connector to Domain 2, but the problem quickly reappeared.