BuddyPress.org

@caesarhills
Have you tried deactivating all plugins other than buddypress and activating a known theme that works well with BP like twenty fourteen? Sometimes plugins and themes can cause issues with the activation email. If that resolves the issue then you will know it was a faulty plugin or theme.

@caesarhills
Have your test users checked the spam folder in their email because sometimes it goes there. You may also want to check your servers error logs as well.