SharePoint "Everyone except..."

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Hello, is it expected behavior that if someone is a member of an O365 MS Team and is part of "everyone except external users" that the permissions on the 'everyone except external users" override that he is a member of an O365 team?

 

My company made some changes to IT processes so I am not sure if this is a 'my company thing" or if working by design.

 

If John Smith is assigned both 'Edit rights" and "Everyone except external users (read)", will John be able to edit? 

 

I should also note that when I tried to set it up this way at the library level, it automatically flowed through to the site level.

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