Hi Jason Franklin,
Thank you for posting your question in the Microsoft Q&A forum.
Do you create the new AD account with the same name? What about create a new account with different name?
Noticed that you have permanently deleted the user in Entra, please also confirm that this account does not exist in Deleted users from Admin center and AAD side.
Since you tried to assign license to the old account to enable mailbox, please use the following command to check if any soft deleted mailbox still remains for the old account in Exchange Online:
Get-Mailbox -SoftDeletedMailbox | fl ExchangeGuid,Guid,PrimarySmtpAddress
Then use the following command to delete is permanently:
Remove-Mailbox -Identity Exchange_Guid -PermanentlyDelete -Confirm:$False
You can check this article for more details: How to purge mailboxes in Exchange Online - Microsoft Community
If suggestions above still cannot resolve your issues, you also can raise an O365 support ticket from Admin center to see if we can get help to check and resolve from O365 backend server side.
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