Posted in Web Azure AD with local domain – social.msdn.microsoft.com August 12, 2023 Users created in Azure AD will remain in the cloud as cloud-only users. If you create a user on-prem with the same UPN or proxyAddresses, then the cloud user will be taken over by Connect and managed from on-prem in the future. https://social.msdn.microsoft.com/Forums/expression/en-US/ca407c3b-18ca-4783-977c-fc55cce712d6/azure-ad-with-local-domain?forum=WindowsAzureAD