'Microsoft.Exchange.WebServices.Data.ServiceResponseException: The account does not have permission to impersonate the requested user.'
Even though all permissions are set correctly on the Admin Account used in Folder Sync to log onto O365 powershell the error is seen.
This issue is seen when the Admin Account used in Folder Sync Properties for Office 365 is the .onmicrosoft.com account instead of an account with the same domain of the users.
Change the Admin Account to be the same as the customer domain.