For security reasons, Microsoft has disabled Azure Access Control (ACS) only for new Office 365 tenants by default. This prevents the creation of new catalogs that use an ACS app-only approach to handle permissions on the site collection only. In this case, you receive a SharePoint Online authorization issue "Token type is not allowed".
To enable this feature, you need to connect to SharePoint using Windows PowerShell and then run Set-SPOTenant -DisableCustomAppAuthentication $false.
Run the following commands on PowerShell:
Install-Module -Name Microsoft.Online.SharePoint.PowerShell
$orgName="<name of your Office 365 organization, example: contosotoycompany>"
Connect-SPOService -Url https://$orgName-admin.sharepoint.com
Set-SPOTenant -DisableCustomAppAuthentication $false
Please note:
-
Fill in the values for the $orgName variable (replacing all the text between the quotes, including the < and > characters).
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When prompted with the Windows PowerShell credential request dialog box, type the login/password for the SharePoint admin account.
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