Hi Edward,
Sometimes, this issue can be caused if the SIP address is not set up properly in the proxyaddress attribute. Therefore, I suggest you perform the following steps to check the proxyaddress attribute first:
1. On the local AD, open ADSIEdit (Adsiedit.msc)
2. Right click one of the problematic user accouns, click Properties.
3. Double click the proxyAddresses attribute, and check if the SIP address is shown as "sip:joe@contoso.com". If not, please manually add the SIP address and check the Lync credentials issue again.
If the issue persists, I would like to collect the following information for further research:
1. How many users are impacted by this issue?
2. Can Lync work properly on a computer which is not domain joined?
3. Capture a screenshot of the error message.
Thanks,
Mindy Pan