Auto reply adds the sernver dns name as reply from and bounces

We up-stream to an smtp relay server that has some strict rules in place. They are not our ISP but have white listed our domain name to allow us to relay through.
Things work well but now auto replies like vacation rule messages now bounce.

The rejection has: (550 Please use SMTP authentication - (our IP address)

The relay host is rejecting the mail because it appears to come from

The addition of the my mailserver name the entry I have as hostname in the Hostname A record field is being interpreted as my domain name and as such is not white listed.

This only happens in auto reply rules. If I completely remove the entry from the Hostname A record field then the auto replies and other mail appear to work just fine since I guess I may not need the hostname entry since I am using a relay host.

Is this normal though for GW to add the hostname like this to make the mail appear as if it coming from an extension of my actual domain name? If not, (and I am assuming it may not be normal) how do I fix this? Why is it only happening in auto replies?


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