This happens only with one user (That I know of) We have an on-premise AD that syncs with Azure AD. We are unable to type in the one users' email address or name and have it return the option to send an invite from a Sharepoint Team site. Created a new test team site, and when I try to add the same user, I get Sorry, we're having trouble reaching the server. The AD account was imported from another AD a year or so ago. I can choose people from the same OU that were imported the same way without issue.
To troubleshoot the issue, check things below:
Delete the user and re-create the user in AD to check if the same issue will occur.
Check if the site collection feature “Limited-access user permission lockdown mode” is activated. If it is activated, deactivate the feature to check if the same issue will occur.
Go to site settings-> Site Collection Administration-> Site collection features->“Limited-access user permission lockdown mode” site collection feature.
Found the issue. The user had an odd entry in the Organization AD tab under Job Title. This account had been imported from another AD domain. Somehow the Job Title had an odd character in front of it. It was something like ]Account Manager. After removing the symbol similar to ] (it was a character not on keyboard )that proceeded Account Manager and synchronizing AD again, the issue was resolved. It turns out it also resolved it for choosing anyone with the same first name.