Hello, @zohaib yousuf,
Welcome to the Microsoft Q&A platform!
Based on your description, I understand that your Room Mailbox free/busy do not work with office 365 mailbox in Hybrid Environment, while it works fine with on-prem mailbox.
What are your current default permissions settings for the “Calendar” folder? To find this, please follow the steps below.
- Open and log in to OWA.
- Right-click on the folder and select Sharing and Permissions.
- In the dialog box that appears, you will see a "Permissions" tab where you can view and change the default permission settings.
According to the official Microsoft documentation, if the default permissions are set to None or Contributor, no free/busy information is displayed for remote users, and users cannot view the mailbox calendar. This is because neither kind of permission offers any level of free/busy visibility.
If a remote user must be able to see free/busy information for the mailbox, the mailbox owner can work around this issue by changing the default permissions to Free/Busy time or Free/Busy time, subject, location. For specifics on how to accomplish this, you can click on Users can't see free/busy information after a mailbox is moved to Microsoft 365 - Exchange | Microsoft Learn for reference.
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Thank you for your support and understanding.
Best Wishes,
Alex Zhang