I don't think this issue was specifically caused by the usage of telnet, likely it was a coincidence. Azure platform blocks outbound SMTP connections on TCP port 25 for deployed VMs to ensure better security for Microsoft partners and customers, protect Microsoft’s Azure platform, and conform to industry standards.
If you are using an Enterprise Agreement subscription, the outbound SMTP connections on TCP port 25 won't be blocked. However, there's no guarantee that external domains will accept the incoming emails from the VMs. If your emails are rejected or filtered by the external domains, you should contact the email service providers of the external domains to resolve the problems.
If you are using a Pay-as-you-go subscription, outbound port 25 communication is blocked from all resources. No requests to remove the restriction can be made, because requests aren't granted. If you need to send email from your virtual machine, you have to use an SMTP relay service.
If you are using an Enterprise subscription, you can request to have the block removed by going to the "Cannot send email (SMTP-Port 25)" section of the Diagnose and Solve blade in the Azure Virtual Network resource in the Azure portal and run the diagnostic.
Hope this helps! Let me know if you still have questions or need help.
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