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I understand that you are facing an issue with the invite an external user in Entra External ID External tenant.
The Invite external users' option in the External tenant is currently under Preview. For invite you can use any ID like non- MS account google, hot mail, yahoo without any configuration. The process you followed is correct to invite external user.
I have tested your scenario from my end, and I didn't see any issues could you please check this in the different browser or clear the browser data and see the issue is fixed.
Reference: https://learn.microsoft.com/en-us/entra/external-id/add-users-administrator
Hope this helps. Do let us know if you any further queries by responding in the comments section.
Thanks,
Akhilesh.
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