There is a very similar Q&A out there, but since that thread is locked, I want to provide a bit more detail after I had to open a case with Microsoft.
Scenario: we created a distribution group with on-prem Active Directory. We sync with Azure AD Connect (DirSync) to Office 365. We have a program that sends emails via SMTP relay to external email addresses using this distro group. Sometimes these external addresses have become invalid. The employee triggering the email needs to know that the address is bad. The employee is a member of the same distribution group.
Problem: the NDR (bounce back) is failing to be delivered to any member of the distro.
Event: Drop - Reason: {LED=250 2.1.5 RESOLVER.GRP.NotRedirected; messages of this type are not delivered to groups}
Resolution: I tried the fix LarsFreiberger posted but it didn’t work. I opened a case with Microsoft. These settings are in ADSI for the distro group. I already had “reportToOriginator” set to TRUE. I set “reportToOwner” to TRUE but it didn’t fix it. Microsoft pointed me to KB2618599 which states only one of these may be true. We disabled “reportToOriginator” and performed a full synch to Azure AD. Then verified the change with PowerShell:
$cred = Get-Credential
$s = New-PSSession -ConfigurationName Microsoft.Exchange -ConnectionUri https://ps.outlook.com/powershell -Credential $cred -Authentication Basic -AllowRedirection
$importresults = Import-PSSession $s
Get-DistributionGroup *** Email address is removed for privacy *** | FL
---output truncated---
ReportToManagerEnabled : True
ReportToOriginatorEnabled : False
SendOofMessageToOriginatorEnabled : False
That’s all. Thanks.