Mapping AD Groups to O365 Groups results in error "User Not Found. Error: The remote server returned an error: (404) Not Found"
O365 group mapped using friendly name.
Update the user mapping file to use SID for source AD Groups and M365 Group ID for target group:
<Mapping Source="[SID]" Target="[O365 Group ID]" IsDomainGroup = "True" />
For example:
<Mapping Source="c:0+.w|s-1-5-21-2451590988-2661127682-4265257333-8311" Target="c:0t.c|tenant|4f9df003-3e1d-4948-csb2-71a432f64ea7" IsDomainGroup = "True"/>