One user generates NDR from non-existant user when they receive a Meeting Request

This seems very strange at first.

User A receives a meeting request, the sender of the meeting request then receives a NDR from a user that seemingly doesnt exist in AD.

This only happens when a meeting request (not an email) is sent to User A.

There are a number of reasons this can occur, firstly Delegates from yester year (no longer in AD) could be on the profile, this can be checked in Outlook, or in more depth in MCFMAPI

Another reason is reminance of Outlook rules, these could be client side or server side. See Outlook help for more information on this.