Sounds Expected. No need to delete the user and recreate :)
Office 365 Displays Users Object ID Instead of Name
k d
16
Reputation points
When I add the user's name in the list of permission, Exchange displays the user's Object ID instead of the user's name.
It displays the user's name correctly in the list, but when I select it to add to the permission list, it changes it to the user's Object ID. I have deleted the user and recreated it, but all exhibited the same issue.