Apologies for the delay in answering this query. As I understand your issue is users are synced as email@example.com instead johndoe@jaswant .com.
When you synchronize your on-premises directory with Microsoft 365, you have to have a verified domain in Azure Active Directory (Azure AD). Only the User Principal Names (UPNs) that are associated with the on-premises Active Directory Domain Services (AD DS) domain are synchronized. However, any UPN that contains a non-routable domain, will be synchronized to an .onmicrosoft.com domain.
Would like to understand did you verify your domain in Azure AD/O365 ?
Refer to this article about the steps how to verify the domain - https://learn.microsoft.com/en-us/azure/active-directory/fundamentals/add-custom-domain
Let me know if you have any questions.
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