You can’t use the domain because it’s not an accepted domain for Exchange System yet
Been getting cases about domains not accepted on Office 365. Error would go like “You can’t use the domain because it’s not an accepted domain for Exchange System yet”
Based on my experience, it may take 72 hours to take effect after verifying custom domain and adding DNS records in Office 365. So I usually would suggest to wait it out for at least 24 hours to see if the issue resolves by its own. Usually it does, unless there’s a bug somewhere on the portal.
What you can do to troubleshoot.
1. Go to Exchange Admin Center
2. Select Mail Flow > Accepted Domains
3. Make sure both yourdomain.com and yourdomain.onmicrosoft.com have this “Domain Type=Authoritative”, with yourdomain.com set as default domain
4. If you have access via Exchange Online Powershell, you can try running Get-AcceptedDomain to see if your domain is listed there.