B737 MAX 8 Captain reported pressurization system malfunction during cruise. Flight diverted and landed safely.

Narrative

First Officer was Pilot Flying; Captain was Pilot Monitoring; and a ZZZ 737 FO was in the jumpseat. Aircraft was on an MEL for auto cabin pressurization controller #2 inop; and cabin Pressurization Mode Selector was in the ALTN position for departure - this was discussed in the predeparture briefing. After 14 minutes cruising at FL 350; my ears popped at the same time the Master Caution light illuminated and the Auto Fail light illuminated on the forward overhead panel. Cabin rate indicator was pegged at 4000fpm. We donned O2 masks; [requested priority handling] with ZZZ Center; and initiated an emergency descent to 10;000 feet. QRC procedure for Rapid Depressurizaton was reviewed even though red Cabin Altitude light was not yet illuminated. Emergency Descent QRC was also reviewed. I elected not to manually deploy oxygen masks or verbally command the cabin to use oxygen since the Cabin Altitude light/horn were not activated and previous actions appeared to improve the cabin pressurization rate and differential pressure. During the descent; all three pilots remained on O2. FO did an exceptional job flying the aircraft and got us pointed toward ZZZ1. I turned to hand the jumpseater my iPad with QRH open; and he already had his out and ready to go - outstanding! FO sent ACARS message to dispatch informing Person A of the problem and that we were pointed at ZZZ1. The QRH procedure for Auto Fail or Unscheduled Pressurization Change was accomplished with assistance from the jumpseater. At this point; with the outflow valve previously closed (manually); cabin pressure had increased and was now about 8.6psid. Cabin altitude indicated below sea level as our descent continued. Outflow valve was activated (one click toward open) and appeared to operate normally with cabin rate responding appropriately. The nonroutine landing checklist was reviewed with the jumpseater reading aloud. With aviate; navigate; communicate; and the pressurization situation stable; the FO continued flying and the jumpseater monitored cabin pressure and backed up the FO. I talked to the FA's and made a PA to the passengers. I told the FA's what had happened; that there was a slim chance of mask deployment and to be ready in case. I asked them to prepare the cabin and take their jump seats. They had no other concerns to communicate; so we agreed to talk again in a few minutes or as needed. I made a PA to the passengers explaining the pressure change they felt; the fact that we were descending to a lower altitude and that we would be landing short of the destination. I told them we would be making a normal arrival into ZZZ1 and that they would be rerouted to their destination after landing. Everyone was calm and content.Approaching 10;000' and seeing that the cabin altitude was no longer at risk of exceeding 10;000'; we removed and stowed O2 masks; completed the descent checklist; and discussed our landing weight. We were about 6000# overweight for landing and discussed the merits of holding to reduce weight vs. landing overweight at ZZZ1. We agreed that holding was warranted since pressurization wasn't an issue; masks didn't deploy; and we had no known injuries or complaints. The aircraft was 'normal' at 10;000'. I used the crew phone to call the dispatcher (Person A); and we discussed the options. He agreed that holding to land at normal structural weight made sense. We discussed other destination options; and agreed that ZZZ1 was best equipped (and ready) for our arrival. FO talked to ZZZ1 Center and coordinated a 10-mile leg holding pattern about 50 miles from the airport. The FMS was programmed; and we entered holding to adjust gross weight. We agreed that utilizing gear and flaps with APU would help accelerate the fuel burn. I called the FA's to check on them and the passengers. They said that everything was completed and the passengers were calm with no complaints. I told them to let me know if that changed; otherwise wewould hold for about 30 minutes to reduce to normal landing weight. I made a PA to inform the passengers of the holding and that the cabin would get a little noisy as we lowered the gear to burn down fuel faster. I let them know that ZZZ1 was prepared for our arrival and already was working a plan to reaccommodate their travel. During the hold; we reviewed our actions to that point; completed normal checklists; briefed the approach; and discussed our plan to taxi to the gate after landing. Once aircraft weight was close to maximum landing weight; we departed the hold and were vectored to the longest runway (XXR) for landing. Landing was uneventful at about 151;100# (max is 152;800#). Tower asked us if we needed assistance for hot brakes or overweight landing as they weren't informed that neither of those were a problem. I thanked them for being prepared for us; and said we didn't need assistance. Taxi to the gate was uneventful. After landing; I asked the pilots and FA's to remain onboard to do a short debrief. We discussed the events; what we did well; and what we could have done better. There was agreement that the situation went about as well as it could have. The FA's commented about how secure they felt and how their passengers responded so favorably to the messaging. They reported that nobody had any complaints about medical issues or anything else. I spent time with two maintenance technicians going over the details of the event. They were also informed that we landed overweight. I spent some time showing them our fuel; aircraft weight; structural limits etc.; before they were able to overcome the inaccurate information that had been passed to them. My post-event observations are that a potentially devastating depressurization was nearly a non-event as a result of many factors. The cockpit crew had almost 30 years combined 737 experience and had practiced emergencies like this in dozens of simulator sessions. There's no substitute for experience. The FO and I were partners during recurrent training. We were comfortable working together; and I knew him to be a competent and diligent aviator. I briefed the jumpseater; as I learned from many great Captains in my past; that he was a full member of the crew; that I wanted him to speak up anytime he saw us make an error or forget something; and that we especially valued his knowledge on this aircraft since he was current and qualified. He responded (and later performed) enthusiastically. I can't overstate how much easier it is to manage 4 or 5 time-critical tasks with a competent jumpseater. I can't imagine handling everything quickly/correctly in a single-pilot cockpit; regardless of experience. Recurrent training that emphasizes strategy proved helpful. With the FO dedicated to PF duties; I was able to manage the many other factors required to ensure a successful outcome. As mentioned; the help and backup of the jumpseater served as a great barrier to identify and trap errors. Outside the cockpit....ATC was extremely helpful. They all went out of their way to help and accommodate our requests. Their questions were short and timely; and they were extraordinarily professional. In lieu of setting up an arrival; they readily accommodated my request for vectors to final. Person A (dispatcher) was very helpful; yet he demanded almost none of our time. He coordinated a bunch of things to change our destination; get us weather; NOTAMs; and a fuel plan; prepare the station; jointly confirm our plans; and ensure that any resource we might need was available. I'm sure he had help; so thanks to all those behind the scenes. The FA's listened well; communicated clearly and simply with me; and kept the cabin in a state of calm the entire time. They were prepared for other contingencies and did an excellent job avoiding interruptions early in the descent when we were most busy. They expressed a knowledge of 'something not being right when our ears popped' but knew that I'd get to them when I could. Coordination with them was simple; clear; and took little time. They were professional and performed well. The agents were well-prepared for our divert. They worked nonstop for over an hour to accommodate every passenger. I checked on them a couple times figuring that the passengers might be irritable given the divert. I found the opposite. The agents were engaged in pleasant conversation and the passengers; though inconvenienced; seemed to grasp the necessity for the divert and were even grateful in some of their conversations with me. They all seemed at least content with the plan to get to their final destination. A couple talked about their ear popping; and I explained that ours did the same as well as the normal physiology that causes everyone's ears to do that on every descent. The aircraft had an MEL for pressurization controller #2 inop. Aircraft dispatched with MEL rather than troubleshooting to confirm/correct. In this case; the #2 was placarded inop - probably due to some fault code shown. There are at least six reasons in our manual for autofail to illuminate. The root cause could be a few different things which would (and did) cause the other controller to hiccup/fail as well. On-time departure takes precedence; and too many aircraft are flown on MEL's (including this one). MUCH more effort needs to go into root cause troubleshooting before just slapping on a placard to move the metal. This cause needs attention!