For Hybrid Exchange Office365 implementations without Azure AD connect (or AD FS – Federation) implemented.

A common Exchange hybrid implementation has the MX record pointing to Office 365, with the mail domains configurated in Office 365 as internal relay, and the mail domains on-premises as authoritative.

This way, if a message is sent from a cloud mailbox to an address O365 doesn’t know about, such as a distribution group or mail enabled public folder, then it will be routed through the relay to on-prem Exchange.

This configuration prevents the PoliteMail Server from expanding the distribution group get getting membership.

In order to expand distribution groups, the following configuration should apply.

1. The PoliteMail Server EWS endpoint needs to be the on-prem Exchange end-point
NOT the O365 endpoint, so when the ExpandGroup request is made for any given DL,
the on-premise exchange will return the list membership.

2. For PoliteMail Users / Senders with accounts on Office365 wanting to send to Distribution Groups maintained on the on-premise Exchange, the distribution list name needs to be recognized as a group (not an address) within Outlook (because PoliteMail will not utilize the relay technique).

To accomplish this, create an identical distribution group name, with no members, within Office 365 Admin Center.

This way, PoliteMail for Outlook will recognize the list name as a group, and the PoliteMail Server will reference the on-prem Exchange using the identical group name, to expand the list membership.

If AAD is implemented, but email is not going through or list membership is not being accurately counted or expanded, then the Exchange admin should check the following:

Open AD Connect “Synchronization Service Manager”
Select “Connectors” tab.
Right-click on each connector, and select Properties.

In the Connector Designer column, click Select Attributes, and confirm member is a selected (checked) attribute.

Now Save and manually Re-Sync the connector