Masquerade domains and Proofpoint Essentials

Customers who have configured a masquerade domain on a virtual SMTP server may experience problems sending outbound emails through the Proofpoint Essentials platform. Proofpoint Essentials does not support the use of masquerade domains - this is because emails may appear to be sent by mailboxes that are not registered on the platform and will be denied relay access.

Also see:

Can Proofpoint Essentials be used to forward email for non-registered domains?

554 5.7.1: Relay access denied

Sending to Distribution Groups with external domain recipients