Why this is not the issue? If you have duplicate SMTP addresses in the local AD, DirSync won't sync the change to Office 365. If DirSync cannot sync this change to cloud, how SMTP match work?
To fix it, change the primary SMTP address on both the Office 365 side and the local AD side to a unique address, such as joe.user123@company.com. After SMTP match works, you can change the SMTP address back to the address as you want on the local AD.