Thank you very much @Ashwin_DSA for confirming my findings that there's currently no way to limit the picker to current workspace users.

For the record:

We have requested via our Azure support channels that our request for such a feature be escalated, FWIW.

I'm not sure at this point if we should try to put in the request via Databricks partner contacts as well, us much as we as recently-started partner have access to them. What do you think?

For the record:

• On the short term, having it restricted in the people picker would already help a great deal, but indeed API / permission layer would be ideal.
• We had AIM briefly enabled (around 1 day), until we saw this identity directory leakage at which point we promptly disabled it.
• We are using Azure Entra ID with Azure Databricks.
• Our requirement is driven by customer isolation. We don't want customer X browsing customer Y's users.
• Workspace-only mode would be fantastic, as we are already relying on workspace isolation for all of our other customer-driven requirements.