Hi GlacierAdmin (Josh)
Thank you for your over the call.
As moved DNS to Azure, we checked the DNS record for TXT record and able to resolve the record globally, but it wasn't able to add it on the default directory,
which could be the issue on active directory side and similar post was shared below for your reference.
Thread link: https://learn.microsoft.com/en-us/answers/questions/4376338/unable-to-verify-custom-domain-in-azure-active-dir
So, I would request you to create another Q&A thread by selecting service area as active default directory and share me the new thread, so that I can coordinate with team to resolve your issue.
I hope this helps! If these answers your query, do click the "Upvote" and click "Accept the answer" of which might be beneficial to other community members reading this thread.
If the above is unclear or you are unsure about something, please add a comment below.