Issue:
I won’t share my exact email but its a vanity domain with an unusual TLD, and the bit before the @ is just a single letter.
I can receive magic link emails, etc, with no problem, but I often get notifications saying that you couldn’t send an email - for example - to announce T&C changes.
My email is hosted by GSuite and is indeed valid and working! 
I am wondering if there is a bug in your mass mailer system which prevents it from validating addresses like above
I’m using a custom subdomain for my email too. I’m not using a single letter on it’s own before the @, but the subdomain i’m using for email is in the format of ??.??-????.uk and this is working perfectly with Monzo for me.
I wonder if you would have the same issue if you used something slightly longer before the @ (recommendation is usually at least 3 characters a anything shorter my be considered spam-related), instead of just a single letter? If you are the domain owner, couldn’t you test with a “catch-all” address which I believe is available in GSuite.
I’m curious now, what’s the unusual TLD?