What is interesting after following the steps mentioned, customer was still not able view free busy information for the other organization from outlook or from OWA.
Here is the trick that needs to be followed to make it work.
Both organizations are not fully cloud only and their autodiscover was still pointing to onpremise server due to some obvious reasons.
Instead of troubleshooting the autodiscover for their environment and getting the free-busy work , below simple manual fix resolved the issue.
All user mailboxes are already migrated to Exchange online so here is what we did that resolved the issue.
- Added mail.Onmicrosoft.com address to the list of domains.
- Added outlook.com in Application URL
- Updated Autodiscover endpoint with https://autodiscover-s.outlook.com/autodiscover/autodiscover.svc/WSSecurity
Now I can see smile on exchange admin faces as they already know why this worked :)
If you or your partners are in similar situation just do this simple manual trick and it will work.