I've had discussions with the developers, including the one that wrote the code for the DS connector, and at the moment it appears LEM will always work this way. Part of this is because of the use case where there are sub-domains: apparently Java doesn't handle dev.domain.com and domain.com well, which is a shame. Also, the DS connector works with multiple LDAP systems, not just Microsoft, so this is part of that "agnostic" integration.
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