Migration from Google Workspace to MS365 fails, TargetDeliveryDomainMismatchPermanentException

Question

I am planning on migrating our assets from Google Workspace to MS365. We currently have a very hybrid solution (Workspace, local Active Directory syncing via Entra Connect, and MS365). Since Office apps and Outlook aren't going anywhere due to user/owner preferences, I plan on eliminating our Workspace subscription.

A few weeks ago I set up Entra Connect to sync the local AD accounts with Entra, and that worked out just fine. My next step is to migrate the emails. I followed the instructions from the link below:

https://learn.microsoft.com/en-us/exchange/mailbox-migration/perform-g-suite-migration

And performed a manual sync of just one mailbox using the manual method. Followed all of the steps and configured everything correctly (I thought). Everything synced fine, until the end when the status is 'Failed' with the error TargetDeliveryDomainMismatchPermanentException: The target mailbox doesn't have an SMTP proxy matching 'MYDOMAIN.mail.onmicrosoft.com'

Workspace domains:

MS365 domains

On the local AD the proxyAddresses are

SMTP:******@domain.com

smtp:******@domain.onmicrosoft.com

smtp:******@ms365.domain.com

smtp:******@mail.domain.onmicrosoft.com (this one I added as a troubleshooting step)

After sync in the MS365 admin center user emails are

Primary email

******@domain.com

aliases

******@ms365.domain.com

******@domain.onmicrosoft.com

I'm stumped as to what to try next.