Hi Erik John,
Thanks for reaching out to Microsoft!
550 "Sender" is invalid error can occur due to several reasons, including an invalid or non-existent recipient email address, or if email is mistakenly identified as spam by the recipient’s mail server.
550 "Sender" is invalid
is a response from the recipient’s mail server that signifies a failure in email delivery.
I would recommend you raise a support case, a Support Engineer will be able to look into this issue and assist you better. You can raise support ticket from New support request - Microsoft Entra admin center or https://admin.microsoft.com/#/support/requests.
Hope this helps.
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