Microsoft has recently made a few changes to the Outlook auto-forwarding system. They have implemented their own custom blocking which results in emails being rejected when you attempt to forward them to your mailbox address. You can find more information about these changes HERE.
Here are the steps to rectify this issue:
- As an admin go to: https://protection.office.com/antispam
Open Outbound Spam filter policy and click Edit policy
2. Set "Automatic forwarding" on.