Group-Based Licensing (E3 → Business Premium): MutuallyExclusiveViolation – Months Unresolved
We operate a Microsoft 365 environment with Entra ID, Intune, and Exchange Online. For months, we have been dealing with a critical issue that remains unresolved to this day — despite an active Microsoft Support ticket. The Technical Problem: During the migration of approximately 87 user accounts from Microsoft 365 E3 to Business Premium (SPB) via group-based licensing in Entra ID, all affected accounts receive a MutuallyExclusiveViolation error. Microsoft's backend treats E3 and Business Premium as mutually exclusive, blocking the SPB assignment — despite sufficient licenses being available. A sequential approach (removing E3 first, then assigning Business Premium) is not an acceptable solution: a test run proved that this causes a complete loss of Exchange Online access. For a rollout across 87 productive user accounts, this is not viable. What is required is a seamless, atomic license swap at the backend level — exclusively via group-based licensing. The Support Problem: Two support engineers assigned — zero technical progress. Instead of a substantive solution, we received standard documentation steps that do not address the actual problem. A false resolution notice was issued — the issue had demonstrably not been resolved. Our own PowerShell tests (Get-MgUser, Get-MgSubscribedSku) and CSV exports from the Entra ID portal disproved this conclusively. Committed updates from the Engineering Team were not delivered. Instead, automatically generated follow-up emails were sent with no substantive relation to the ongoing case. An additional unexplained behavior: a test user appears in the error report of a license group they were never added to — a further backend inconsistency that has not been investigated. Current Status: The ticket has been open for months. 87 user accounts cannot be migrated to Business Premium. An escalation to the Team Manager has been initiated. No resolution is in sight. My Question to the Community: Has anyone experienced a similar issue with MutuallyExclusiveViolation in group-based licensing (E3 → Business Premium)? Is there a known workaround or an official Microsoft statement on this? Ticket Reference: #2604241410000669