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Documenting this if this helps anybody in the future. It looks like we fixed this by switching to port 587 (TLS enabled). Based on this Connecting to the Amazon SES SMTP Endpoint - Amazon Simple Email Service , AWS throttles on port 25 by default and I guess we were hitting whatever limit they have.
Just want to say thanks for your post, this has solved my issue too!
Issue: some users not receiving subscriptions and last update showing "Never", "SMTP host unreachable" in log file. Tableau Server 2018.2.2 hosted in AWS using Office 365 (smtp.office365.com)
Resolution: Change SMTP port 587 (we were using the default 25)