In a hybrid environment with on-premises Exchange and Azure AD Sync, users with on-premises mailboxes may experience limitations in certain applications, including Microsoft Loop. The issue you're encountering, where users cannot find others in the organization while using Loop, is likely due to how Loop interacts with Azure AD and the Global Address List (GAL).
Microsoft Loop may have different integration requirements compared to SharePoint and Teams. While users with Exchange Online (EXO) mailboxes can search for users in Loop, those with on-premises mailboxes may not have the same functionality due to potential discrepancies in how user information is synchronized and accessed across services.
To confirm if Microsoft Loop only works with EXO mailboxes, it would be advisable to check the official documentation or support channels for any specific requirements or limitations regarding user lookups in Loop. Additionally, ensure that there are no settings or permissions that might be affecting the visibility of on-premises users in the cloud GAL.
If the users are visible in the GAL but still cannot search in Loop, it might indicate a configuration issue or limitation specific to Loop's integration with on-premises mailboxes.
For further assistance, consider reaching out to Microsoft support or consulting the relevant documentation regarding hybrid Exchange environments and Microsoft Loop functionality.