454 4.7.0 Temporary authentication failureFurther investigation in the SMTP receive protocol log showed this error:
Inbound ExchangeAuth negotiation failed because of UnexpetectedExchagneAuthBlobLuckily based on some quick searches I was able to identify time synchronization as the source of the issue. Active Directory authentication starts to fail when time synchronization is not within 5 minutes. In this case the time difference was 6 minutes.
In the short term, I change the time on one server and verified that mail flow started to work properly. Long run I need to identify why time what not properly synchronized and fix it.