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That email does not need to be configured to send to the vendor in the wp-admin > woocommerce > settings > emails screen, as it is already hard coded within the email code to be sent to the vendor.

We do have some debugging steps here for email issues:

I highly recommend the plugin POSTMAN SMTP https://wordpress.org/plugins/postman-smtp/ . When I had email issues on my own site, they were resolved by going through the configuration steps in Postman SMTP. Also, if you check the logs provided by that plugin, you can see if the emails are actually being dispatched or not. Very helpful.

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