Hi Mark,
Thanks for your updates.
Given the sitiuation, please have a shot at the below two actions and let us know the results:
a. Manually initiate a Full DirSync.
b. Create a new SG from AD and see if SharePoint Online can pick it up after. Note that, it may take some time for the new SG being retrievable by SharePoint Online.
You can currently create a SharePoint Group instead and add the users into it to workaround.
- Go to the site > Site settings > under Users and Permissions, People and groups.
- At the left panel, click Groups.
- Click New to create a SharePoint Group > type in Name and you can leave all the other options as the default.
- Click Create and you will be directed to the group page.
- Click New to add the users.
Then you can configure Audience using this SharePoint Group.
Best Regards,
Rene