You are seeing "loop detected" for messages being sent through the DLP Cloud Service for Email.
This is happening in your O365 setup, even after following the default instructions for O365 Reflecting mode: Configuring Microsoft 365 to use Microsoft 365 for email delivery (Reflecting mode)
Release : 15.8 MP3+
In some cases, the creation of a secondary exception to prevent email loops may be required in the Transport Rule, in addition to the exception that is based on IP ranges.
Add a secondary exception, as below, to force O365 to also check for the presence of an X-DetectorID header in messages being sent to the DLP service.
This is only necessary in specific customer environments, where loops are reported for messages that are sent once but for Microsoftian reasons include all the headers of a prior message (as occurs with Email Delegation, for example).