I’ve run into this error before, and it’s usually pretty straightforward – find the duplicate proxy address (usually), and remove it… problem solved.
This time, however, wasn’t as straightforward – searching for the duplicate proxy address that DirSync was complaining about turned up nothing at all in Active Directory!
I dug a bit deeper into the attributes for one of the affected users, and realized that they actually were missing the proxy address, not that it was duplicated at all. The reason for this is that these users were contractors, so their Primary SMTP address was firstname.lastname@example.org, and even though their UPN was email@example.com, there was no SMTP address for the primary domain.
Adding the missing proxy address resolved the problem immediately, and the users are now properly synced up, and my DirSync logs are clean again!
Hope this helps someone else who gets stuck wondering how no proxy address = duplicate proxy adress!