Cross Server Group Limitations
I’m not sure about dungeons, but it should be possible to join party members in the same overflow server (I can’t say for sure if that’s true even if they’re on different home worlds, but I would think so?). If it’s not working for you right now I’d say that’s the system messing up, because it’s worked fine for me. Last I checked you weren’t able to join someone in their main server, only in an overflow.
I went on an AC run about 4 hours ago with 2 party members in IoJ and 3 in SoS, so yes you can do dungeons cross-server. You should also be able to join parties and meet up with people in overflow servers – maybe he had left LA overflow?