Okay, so the issue is fixed now.
Thank you for pointing out the error in the mysql.log:
postfix/proxymap[11778]: warning: table "mysql:/etc/postfix/mysql/transport_maps_domain.cf": empty lookup result for: "<domain>" -- ignored
That led us to find the issue. It had to do with our migration of the mysql database and it using the transport method: "virtual", rather than dovecot.
Once we made the change to the tables the vacation filter began to work.
Thanks,
Neil