Our company recently went through with the Service Upgrade, everything seemed to be working fine, however.
Yesterday I removed my account from my Android phone, and added it back, (I changed my Msol user ID). When I added it back, I noticed that the "Sync SMS" option was missing from the main Sync menu.
It was still there a few menu levels down, but that option would only Sync Messages to my inbox, not allowing me to send SMS from Outlook or OWA.
Another person in my company also tried to add another account back, they had the same issue, the main "Sync SMS" was missing. We are unable to SEND SMS messages using Outlook or OWA unless this is fixed.
Prior to the service upgrade, there were no issues.