Microsoft has identified a condition where Free/Busy lookups from On-Premises to O365 in a hybrid configuration may fail.
Symptoms
After you install Microsoft Exchange Server 2016 Cumulative Update 8 (CU8), free/busy queries from Microsoft Office 365 users to on-premises mailboxes in hybrid environments fail if the cloud mailboxes are not archive-enabled.
Cauase
This problem occurs because of a known issue that affects OAuth connectivity in Exchange Sever 2016 CU8.
Workaround
To work around this issue, create personal archive mailboxes for each cloud mailbox.
Status
This problem is scheduled to be fixed in Microsoft Exchange Server 2016 Cumulative Update 9 (CU9). For a supported fix for CU8, contact Microsoft Support.
