Hello, I actually came across this issue recently as well. There are a couple of configurations you will need to make sure are accurate before this will work.
Please refer to : https://learn.microsoft.com/en-us/microsoft-365/lti/onedrive-lti?view=o365-worldwide#collaboration-s... and scroll all the way to the bottom section Collaboration Settings for Microsoft OneDrive LTI in Canvas Courses. Ensuring that the External Collaborations Tool is toggled off, and then going to the inherited developer keys section, and enabled the key noted in that document.
These were the steps required to get that "Authorize App to get Groups" button to work properly for my institution.
Hope this helps!