[PeoplePicker] - some users don't receive suggestions

[duckdrone]

Category

[x] Bug
[x] Question

Version

Please specify what version of the library you are using: ["@pnp/spfx-controls-react": "^3.20.0"]

Expected / Desired Behavior / Question

Some of the users do not receive suggestions for PeoplePicker.

While analyzing it, I noticed, that for them /_api/SP.UI.ApplicationPages.ClientPeoplePickerWebServiceInterface.clientPeoplePickerSearchUser doesn't return any suggestions.
value:"[]"

But for others it returns valid suggestions. I tried to modify their permissions in entra portal, however, it didn't help.
Question is, is there any limitation/security requirements on who can see the suggestions?

Observed Behavior

Some users can only user PeoplePicker by providing full email address.

Steps to Reproduce

Add PeoplePicker to SPFx webpart as intended.
Type first 3-5 letters of user/group

Thank you!