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At Derek's suggestion I'll turn my comment into an answer:
The problem sound like the known issue Send Notification Email to Contact on Cases does not send email. If I remember correctly this issue had been in review for quite some time, so requesting an update from support may unfortunately be in order.
There's also this known issue, which sounds similar,...
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One area to think about (not sure how important) is the Account Case relations. With 1.6m records, I'd be wary of hitting the 10k or less best practice for lookups( and master-details) that have impacts on visibility. This may not matter depending upon the how many moves/service/claims requests per account or if you sharing settings are public read-write on ...
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As a workaround, if you can put the record update into a scheduled action rather than an immediate action, then the email notification will be sent.
The minimum time delay for a scheduled action appears to be 1 hour.
Being able to create a scheduled action in Process Builder means that you need to:
Have your process set to execute only on record creation, ...
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