Welcome to Microsoft Q&A Platform. Thank you for reaching out & hope you are doing well.
When using a virtual network as part of a cross-premises architecture, you need to make sure to carve out an IP address range that you can use specifically for this virtual network. If a duplicate address range exists on both sides of the VPN connection, traffic will route in an unexpected way.
Azure VPN Gateway will NOT perform any NAT-like functionality on the inner packets to/from the IPsec tunnels and hence you can't have overlapping IP address ranges between Azure & local sites.
Please refer : https://learn.microsoft.com/en-us/azure/vpn-gateway/tutorial-site-to-site-portal#CreatVNet
https://learn.microsoft.com/en-us/azure/vpn-gateway/vpn-gateway-vpn-faq#can-i-use-nat-t-on-my-vpn-connections
https://learn.microsoft.com/en-us/azure/vpn-gateway/vpn-gateway-vpn-faq#can-there-be-overlapping-address-spaces-among-connected-virtual-networks-and-on-premises-local-sites
So to answer your query in simple terms:
Why between two customers NOT using Azure this is possible : 3rd party VPN devices support NAT, hence this is possible.
Why between two customers using Azure this is NOT possible : Azure VPN gateway doesn't support NAT, hence this is not possible.
Kindly let us know if the above helps or you need further assistance on this issue.
----------------------------------------------------------------------------------------------------------------
Please "Accept the answer" if the information helped you. This will help us and others in the community as well.