SharePoint-current user can't be found in directory

I have a staff person who is collaborating with people who are not on staff. She’s been sharing O365 SharePoint documents and folders successfully for a long time. She successfully shared a particular document with someone but suddenly the person she shared with is getting the following error:
“That didn’t work. We’re sorry, but can’t be found in the directory”

The solution has been to re-share the document. she has editing perms. Couple of questions:
How can i track down what happened to her account?

  1. Does O365 actually create a user account when a document/folder has been shared?
  2. What happened to her account?
  3. Not sure if this is related but I see external user accounts being created and not sure how they get created. they are in the form:

I read in the comments section that someone has a similar issue that started early this month.

The share link might have expired.

Hi Ron,
I would start by asking the staff person to confirm with the external user what Microsoft account they were logged into when they accepted the sharing invitation.
We have had issues with Elders who have a work Microsoft account with their own 0365 organization and accidentally accepted the sharing invitation from there. When they tried to access it on their personal email address that they had accepted sharing invitations before on, then they received these type messages.
Also, you might check your sharing policy on how long the sharing invitation is good for. We set ours at 120 days and external users sometimes get message similar to this when it’s past the 120 day sharing length.

Thank you. I’ll pass this info on. Could you tell me how the guest users that i mentioned get created (e.g. I’m the admin and i’m not creating them so they must be created automatically by another process.

thank you very much. i’m reading through this article.

I believe that account is created when the external user accepts sharing invitations sent by staff. I see a lot of those in our directory too.

that’s what i thought too but i have several external people we’ve shared too that have user accounts haven’t been created.

Hi Ron, it may depend on how the content was shared. If an anonymous sharing link was sent, then an account is not created in the org directory.
If it’s sent an requires them to authenticate then I believe it is added.

This link may help explain better.

excellent. thank you