O365 External contacts contain domain email address in "other emails" how to fix?

we are in a hybrid O365 and on premise exchange exchange (2016). And i am seeing that all external contacts that we add end up with additional "other email addresses" besides the correct (external primary address). The other addresses end with our domain.

Ex. Josmith@abccompany.com will be shown as the primary email - external contact

in the email options however I will see something like this, josmith@mycompany.com and abccompany@mycompany.mail.onmicrosoft.com

The problem now is that if i need to add an internal user that's named josmith@mycompany.com it does not work. It will tell me that josmith@mycompany is already in use.

how do I fix this problem? I can't delete the external contact.
iamuserAsked:
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timgreen7077Exchange EngineerCommented:
This is a result of your email policy most likely being applied to your contacts also. You will need to access the Email Address Policy in Exchange, and select the policy and remove the check from the box "Mail contacts with external email addresses", that will only add the external address you want and not your internal email domain.

also just to note if you have selected all recipients types, then you will need to select the options you want such as:

Users with Exchange Mailboxes
Resource Mailboxes
Mail enabled Groups
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timgreen7077Exchange EngineerCommented:
Provided solution to the author's question. Closing question unless author reopens.
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