A customer was using moderated distribution groups and asked if it was possible to disable the expansion of distribution groups in Outlook. As you probably know, after entering a distribution group in the address bar, Outlook will show a “+” sign next to it which will let you replace the distribution group with all its members as recipients. Especially with moderated distribution groups this might be found an issue, because customers might want to hide membership information from senders.

Unfortunately, hiding isn’t a real option because distribution groups are universal distribution groups and its members are readable. Fiddling around with the ACL sounds like a viable option (remove permissions to read members) but sounds like a potential cause for other issues so I wouldn’t recommend that.
What you could do is remove the option to expand the distribution group by setting one of the following a registry keys, depending on your Outlook client version:
Outlook 2013
HKCU\Software\Microsoft\Office\15.0\Outlook\Options\Mail\DisableDLExpansion=1 (REG_DWORD)
Outlook 2010
HKCU\Software\Microsoft\Office\14.0\Outlook\Options\Mail\DisableDLExpansion=1 (REG_DWORD)
Outlook 2007
HKCU\Software\Policies\Microsoft\Office\12.0\Outlook\Options\Mail\DisableDLExpansion=1 (REG_DWORD)
Outlook 2003 or earlier
Outlook 2003 or earlier versions don’t have this option.
After you set this key and restart Outlook, you’ll see the “+” sign is gone:

If you want to roll out this change throughout your organization, use this key in a custom GPO template or utilize the GPO templates that ship with Office (OutlkNN.adm, where NN is determined by the Outlook version), and configure the GPO accordingly.
Be advised that setting this registry key disables expansion for all distribution groups. Specifically disabling it for moderated groups is impossible, since Outlook has – and should have – no knowledge of the type of distribution group.
Note that the distribution group expansion option is something typical of the Windows version of Outlook, since Outlook for Mac nor Outlook WebApp (OWA) have this option.