Hi everyone,
A Microsoft support agent looking into our ticket suggested we try the following powershell command for our SPO tenant:
Set-SPOTenant -UseFindPeopleInPeoplePicker $false
This had previously been set to $true in our tenant and had never been modified.
After running the command the sharing appeared to start working again for certain sites, but not all of them. Freshly created sites appeared to be working but most of the older sites still received the "we couldn't find an exact match" error.
I ran another command at the tenant level:
Set-SPOTenant -ShowPeoplePickerSuggestionsForGuestUsers $true
This had previously been set to $false. I waited over the long weekend and this week our users appear to be able to share normally again without getting the errors in the people picker when trying to share.
In order to run these commands you will need the SharePoint Online Management shell for powershell: https://www.microsoft.com/en-US/download/details.aspx?id=35588
Run the SPO management shell and connect to your SPO tenant:
Connect-SPOService https://yourcompany-admin.sharepoint.com
A pop-up will appear asking you to sign in. After you sign in you can run the following command to check the SPO Tenant settings that are current for your environment:
Get-SPOTenant
After you check the settings you can try running the following two commands if they aren't already set for your tenant:
Set-SPOTenant -UseFindPeopleInPeoplePicker $false
Set-SPOTenant -ShowPeoplePickerSuggestionsForGuestUsers $true
Here is an article I found laying out the steps: https://helpcenter.elearningforce.com/hc/en-us/articles/6198432297501-Issue-with-the-LMS365-people-picker-not-finding-users
In the article they apply the -ShowPeoplePickerSuggestionsForGuestUsers attribute to a single SPO site they were having trouble with, but I applied it at the tenant level.
Hope this helps somebody!
Regards,
Scott