In Azure, I have invited some external users via their corporate email addresses and they are now visible in our AAD, the source being listed as External Azure Active Directory. I do not know if they had to create a new password when they clicked the link in the email invitation. My question is this: If we add one of these external users to security groups or apps in Azure and they later on leave their job (and have their email accounts closed), will their access to whatever we have granted them access to be terminated as well? In other words: Are external accounts in AAD dependant on them being active in their own ADs, or are they merely copied to Azure AD upon invitation (our users' full names as they appear in their email accounts' name field are automatically shown in the same way in our Azure AD) and thus active until we actively remove them or restrict their access?
An external accounts belonging to another Azure AD tenant is dependant on that tenant identity lifecycle i.e. its owner won't have access to that account - and therefore to your tenant - when and if the organization it belongs to terminates the account. Consumer accounts (hotmail.com, outlook.com) are not subject to an identity lifecycle.