Same problem here. DNN 9.6.1. SMTP checks out ok at the Global/Host level and at the portal level (have settings configured for both, just for grins). Allowing email addresses as usernames. No public registration - I'm registering users manually, and users do get their initial registration emails so I know email is flowing from DNN properly. No other out of the box settings changed. I'm using Sendgrid for SMTP email relay, and it all checks out (the SMTP logs at Sendgrid never receive an incoming email from DNN for the password resets) so it feels like the problem is DNN itself.