Hi @David Aderonmu ,
From the error message, this issue occurs because the Exchange Edge server cannot associate the SMTP address space for the application as a subdomain to the accepted domain. This is true even though the accepted domain is configured as a parent domain.
For your reference: "554 5.4.14 Hop count exceeded - possible mail loop" NDR for outgoing email that's sent to an on-premises application in Exchange Server
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