Thanks for the reply Jolin.
I realize that off boarding while using Staged Migration is not supported. However, this is the workaround that Microsoft recommended to perform while they fix issues with some DirSynced users.
This issue is discussed here:
community.office365.com/.../527861.aspx
I tried removing the license of the off boarded users and this results in email delivery failures when on boarded users (users migrated to 365) send emails to off boarded users.
On the Exchange Admin Center on the Office 365 portal,under recipients -> contacts, I noticed that users who have never been migrated yet are listed as 'mail users'.
I believe DirSync automatically sets up the non migrated users on Office 365 as 'mail enabled' users.
When migration is performed for a user, the respective 'mail enabled' user on Office 365 is changed to a 'mailbox user'.
I guess what I need to know is how to change a 'mailbox user' on Office 365 to a 'mail enabled' user. I believe this way the off boarded users will also behave like the users who have never been migrated to Office 365.
Thank you for trying to help but I really expected more in depth replies from Microsoft support personnel rather than suggesting experimental techniques since we are dealing with Production here and you guys should be knowing the product inside out.