We run split-domain configuration across multiple client domains in combination with Microsoft 365 (O365) and encounter no problems under v17 including the latest 30th July 2020 build. Nothing, fancy, the config follows the steps outlined in the first post so nothing unusual.
Outline of the config:
1. Public MX points to M365
2. Domain configured within 365 as internal relay
3. A connector scopes all tenant domains, delivers to the hostname of smartermail, TLS enabled
4. Smartermail configuration:
4a. Inbound message delivery = external MX
4b. Deliver local = yes
4c. SMTP authentication = yes
Any given user is only defined in 365 or Smartermail so that mail flows between environments.