On-premise Exchange 2010 SMTP Relay to O365 mailboxes does not resolve Display Name

Dear All,
We have SMTP relay receive connector in our on-premise Exchange 2010 server that accepts emails from anonymous users.
The Externally Secured check box is checked. Display Name of the sender in Emails to mailboxes in on-premise is resolved correctly. 
But the display name of the sender in the same email to mailboxes which are migrated to O365 is not getting resolved.
Please let me know if anyone has seen this issue. Some of our mailboxes are in O365 and some are in On-premise server.
Thanks
Fred

Do you have a hybrid configuration set up, and if not, is there any particular reason?
Ed Crowley MVP "There are seldom good technological solutions to behavioral problems."

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