Hello @Andy Mack ,
Thanks for reaching out and apologize for the delayed response.
Based on your query, I understand that you are attempting to utilize SMTP matching to match on-premises user accounts to Office 365 user accounts (with M365 mailboxes linked), as detailed here. Please let me know if I've misunderstood.
As far as I am aware, this configuration is safe, but make sure you have good data on-premises since all attributes in Azure AD are going to be overwritten. For example, if you only have managed email address in Microsoft 365 and not kept it updated in on-premises AD DS, then you lose any values in Azure AD/Microsoft 365 not present in AD DS.
Additionally, I would encourage you to utilize our dedicated Office 365 community forum to get a second perspective on this case from office 365 specialists on Mailbox perspective. Hope this helps.
-----
Please "Accept the answer" if the information helped you. This will help us and others in the community as well.