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Hello <Name removed>,
Thank you for your reply,
If you are using pure cloud environment please note Group Policy Objects (GPOs) are not supported in pure cloud environments. However, you can use Azure Policy to enforce policies across your cloud environment.
So far based on my knowledge Azure Active Directory Domain Services (Azure AD DS) supports Group Policy Objects (GPOs). You can edit the built-in GPOs and create your own custom policies in an Azure AD DS managed domain. To administer group policy in a managed domain, you must be signed in to a user account that's a member of the AAD DC Administrators group. Reference: Create and manage group policy in Azure AD Domain Services | Microsoft Learn
would this work for incoming emails as well? based on my knowledge Yes, you can turn off automatic hyperlink in Outlook for all users using group policy. This will work for incoming emails as well. But since we are not using the same environment i can't test from my end to double confirm but our dedicate team for hybrid environment team can make a test to double confirm with you. So, I'd recommend you please kindly contact to our dedicated to double confirm Microsoft Exchange Hybrid Management - Microsoft Q&A.
Please feel free to let us know if there are any questions or if we've got you wrong. We will keep assisting you based on the information you provide. We sincerely appreciate your patience and cooperation.
Sincerely, Eben Ezer Tres | Microsoft Community Moderator