Thank you @Stephen! I did add an MX record pointing the discourse subdomain to my hosting account at Cloudways, but when I tried to create the email address using their rackspace addon it says “(!) discourse.mydomain.com already exists as a domain or alternate domain” and does not allow me to create the email address.
Edit: realizing now that I only updated one of the DNS records required by Rackspace, and not the MX records. I’ll try this again.
Edit2: I updated the 2 MX records and the TXT record from these instructions https://docs.rackspace.com/support/how-to/set-up-dns-records-for-cloud-office-email/ and am still getting the same error.