Rule-based membership fails for security enabled distribution group with error "The term 'Add-DistributionGroupMember' is not recognized as the name of a cmdlet, function, script file, or operable program. Check the spelling of the name, or if a path was included, verify that the path is correct and try again."
So adaxes obviously know it is distribution group, but somehow forgets to connect to Exchange Online before running this PowerShell command.
Here is rule based set up.