When filtering a lookup based on related records in Dynamics CRM Online 2015 Version 7.1.* (Update1) environment, all active records are displayed with the initial dropdown is displayed, instead of the filtered results. Filtered results are displayed by clicking "Look up more records".

It was also reported in Microsoft Dynamics CRM 2015 Update 7.0.1 environment, however it is resolved in Update 0.2.

Title: Update 0.2 for Microsoft Dynamics CRM 2015
URL: https://support.microsoft.com/en-us/kb/3075889

So please provide fix for Dynamics CRM Online 2015 Version 7.1.* (Update1)