When attempting to add users to the Message Delivery Restrictions -> Accept messages from: option of a Mail-Enabled Universal Security Group or Mail-Enabled Universal Distribution Group from the Exchange Management Console (EMC) on a Microsoft Exchange Server 2010 you may receive the following error:
<Domain Name/Microsoft Exchange System Objects/Public Folder Name> isn't a group or an individual recipient
If the mail-enabled group contains a mail-enabled public folder entry in the Message Delivery Restrictions -> Accept messages from: option, added with previous version of Microsoft Exchange Server, and you try to modify the security group in Microsoft Exchange Server 2010, it will fail with the above errors.
With previous versions of Microsoft Exchange Server we had the option to add mail-enabled public folders to the Accept Messages Only From: field, but due to design changes with Microsoft Exchange Server 2010 you are no longer able to add mail-enabled public folders.
Note: These mail-enabled public folder entries are not going to be displayed in the Exchange Management console (EMC) or the Exchange Management Shell (EMS).
On Microsoft Exchange Server 2010 open the Exchange Management Shell (EMS)
Type in the following Command:
Set-DistributionGroup -Identity <Distribution Group name> -AcceptMessagesOnlyFromSendersOrMembers $null
3. Now you can add the members and make changes to the required mail-enabled group through the Exchange Management Console (EMC).
Important Note: Running this command will also clear all the recipients added to the Accept messages from: option.
To send messages to the mail-enabled group as the mail-enabled public folder you need to assign the send as permission to the required users using the Public Folder Manegement Console.
Using the Public Folder Management Console