I've followed the discussion here and I do have a similar case right after I applied Update-2 to TFS 2013 (Update-1). NOTE: Everything used to work fine prior the upgrade.
I would appreciate the help. Thanks.
I think I figured out what is happening. It all boils down to this: Teams who are not part of Contributors group are not able to receive email notifications.
This behavior is new and was introduced in Update 2 (Update 1 used to work fine).
More discussion about this can be found here
Also, I filled a bug report to Microsoft Connect Feedback here
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