It has been a while, how is everything going now? As I know, it would take a while for the permissions to be synced to your Outlook desktop client. So, it is suggested for you to try the same operations again and see if the issue has any difference.
If the issue still continues, since the same send on behalf operation can work fine on your web mail, I'm afraid that your issue is more related to your Outlook desktop client. According to my experience, most of the similar cases are all related to the old offline address book. So, please try unchecking the Use Cached Exchange mode option via Account settings to switch to the online Exchange mode, restart the Outlook desktop client and see if the issue has any difference.
If it can indeed work fine without any issues, it is suggested to try to update your address book via Send/Receive>Send/Receive Group>Download Address Group, or remove the files in the path: C:\Users#user#\AppData\Local\Microsoft\Outlook\Offline Address Books and restart your Outlook to make Outlook redownload your address book from your mail server.
Similar issue:http://www.chicagotech.net/WordPress/2018/10/02/outlook-error-is-0x80070005-0x000004dc-0x00000524/