Re:Security Group is not showing in Outlook 2016
Mark the following checklist:
1. Do you see DL in Global address list along with user mailbox?
2. Are the users in cached mode? If so take them out, manually download the address book and see if it resolves If it does, I suspect a corrupt OST file.Delete and allow Outlook to re-create if they need to be back in cached mode. Outlook in cached mode needs an interval to update the address book.
3. Run this command update-GlobalAddressList -Identity 'yourtestorg_GAL'
These steps should help you in sorting the problem too.