Hi Jonathan,
I noticed that you’re using the Windows server 2012 Essential as the AD server, if you have already integrated the server with Office 365 via the dashboard, we don’t need to install the DirSync tool again since it provides the same functions as DirSync when we already set the integration. You can find more details about the integration via: Integrate Office 365 with Windows Server Essentials.
Given the information above, if the integration and ADFS service are working fine, please ignore the standard procedure which may prompting you for installing the DirSync tool. Sorry for any inconvenience may be caused by the issue.