I had this issue as well, but with Google Domains forwarding. It turns out that clicking the big red button "Restore Google Workspace Records" on the Domains/Email page (which I did) adds DNS rules that interfere with Domains forwarding rules.
To remove Google Workspace DNS rules:
- Visit https://domains.google.com/registrar/mydomain/dns (replace "mydomain" with your domain)
- Scroll down and click Google Workspace to select the relevant DNS rules
- Click "Delete" next to "Manage"
To re-insert the Google Domains email forwarding records:
- click Email on the left side
- from the yellow banner, click Enable email forwarding only
These changes can take minutes and up to 24-48 hrs to fully propagate.