Dynatrace uses MaxMind Geo2 Database to map and resolve all IP addresses. In this case, as I can see, you are using an IP address to tag the user hence it is difficult to see if the right IP that actually Dynatrace is detected.
To know more, could you please let us know the IP that it is displaying on the user session page when you click on any one of the user sessions performed by that user? This might help in understanding what went wrong.
Also please check in settings about geolocation mapping. Is there any mapping rule that is created for your internal IP.
@waikeat_chan in your screenshot you have the IP as the user id. This does not necessarily mean this was the real Ip of the user. It really depends on how your user tagging is configured for the web application. I suggest you check the real IP address visible in the user session details.