This issue you're facing with verifying a custom domain in Microsoft Entra (formerly Azure AD) is likely due to the domain already being registered in another Microsoft Entra tenant, which is why you're unable to verify it—even though DNS records are correctly configured and propagating.
- The domain was previously used in a test or production tenant.
- Someone else in your organization added it to a different tenant.
- The domain was compromised or mistakenly added elsewhere.