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In the majority of places with O365 I have always noticed that the Site Owners group and site members have their permission locked to Full control and Edit because they are in sync with the permissions of the Inbox annexed. It is not possible to downgrade Edit to Contribute.

However 6 months ago I was in a situation with an enterprise license where I was able to do it. Has anybody experienced the same? It did not seem to me that there were repercussions on the integrity of the inbox if I downgraded Edit to Contribute.

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I think the following article from Paul Papanek Stork will help you a lot setting this security configuration. To wrap up, he says to change "Members" permission to Read and then create a new security group granting "Contribute" permission level.

Check it out and see if the solution applies to you.

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