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NDR - Too many recipients, but it shouldn't

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Dear Technicians,

One of our Office 365 user in my company was trying to send an email to one of our distribution groups with 12 users inside whose email accounts are all in on-premise database (Exchange 2010), and got a NDR back said "550 5.5.3 RESOLVER.ADR.RecipLimit; too many recipients". As the default recipients limitation for 365 accounts is 500, the user shouldn't get this kind of errors in the first place. I also checked the email flow in both 365 and on-premise, it seems that the email had been delivered to our on-premise Exchange 2010 server but then it could not be sent out with "Routing fail". Also, in on-premise Exchange 2010 server, the recipients limitation has been set as 20 in "Organization Configuration -> Hub Transport -> Global Settings -> Transport Settings". Another information is we recently updated Exchange 2010 with Rollup 1 to 5. May I please have your help about this? Thanks.

Yours faithfully,
Steven Liu

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