@stavros mitchell , Please find answer to your questions below:
- B2B direct federation between two azure ad tenant: This cannot be done as the requirement for B2B direct federation is, the domain should not be added as a verified domain under any tenant within Azure.
- B2B direct federation between azure ad and and an on premise AD: This can be done with the help of ADFS server, provided the domain is not verified in any Azure tenant. Refer to https://learn.microsoft.com/en-us/azure/active-directory/b2b/direct-federation-adfs for more details.
If the domain you are trying to add using B2B direct federation is added as verified domain under any Azure Tenant, you will encounter error your_domain.com cannot be used for direct federation as it is a verified domain on an Azure AD tenant.
-----------------------------------------------------------------------------------------------------------
Please do not forget to "Accept the answer" wherever the information provided helps you to help others in the community.