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I am testing our ability to include opt-out as well as unsubscribe by email options to a bulk email newsletter.

When I try to opt-out/unsubscribe from a test message (as recipient) using the provided email address (e.g., u.2679.86732.92da29cb61fe154d@my_organization), I receive another email indicating the opt out address does not exist.

Can anyone help me understand why this error occurs and how I can correct it?

Thanks in Advance!

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it means you haven't properly set up your bounce account - ie. beside not processing the opt-out, you do not process the bounces either -

check the documentation on how to set it up https://wiki.civicrm.org/confluence/display/CRMDOC/CiviMail+Installation#CiviMailInstallation-SettingUptheReturnChannel

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