If centralized mail transport is not enabled, outgoing mail from ExchangeOnline is sent direct to the recipient’s domain using DNS settings. Outgoing mail from the onpremises environment is unaffected.
Through on-premises. If centralized mail transport is enabled, all outgoing messages from
Exchange Online mailboxes are sent to the on-premises environment, and then sent to their
destination domains from there. Therefore, organizations with strict compliance requirements can
ensure that all outgoing messages go through the corporate gateway and any archiving or
journaling of those messages can take place.