When i change the Verify Recipent to "In Active Directory" all incoming email stops working. The following error is reported in the SMTP Proxy log:
temporarily rejected RCPT : failed to bind the LDAP connection to server [IP ADDRESS]:636 - ldap_bind() returned -1
[IP ADDRESS] is the internal IP of the exchange server.
If I change this back to "With Callout (recommended)" email flows fine.
I have checked all the AD settings in Users => Authentication and ran the tests and all come back fine.