Sensitivity Labels for SharePoint/OneDrive and Office Online Not working

[jshelbyjr]

Is anyone having luck with Sensitivity Labels and Office Online (via SharePoint/OneDrive)?  If so, what are the scenarios where it works for you?

Across 4 different tenants so far, I have yet to see this actually work.  I have verified Sensitivity Labels are enabled (EnableAIPIntegration is set to true on all tenants).   I have a few inquires on how F1/F3 users are going to be able to read these protected documents, and so the answer is they can't. 

In-Office Online - we see the "sensitivity" button, but it doesn't allow you to apply any labels (or open docs if it's applied from app).  I've created new doc online and attempted this with same result, where I can't apply the label. 

If it's not clear what I'm attempting - these are the accompanying docs for reference.  

• Enabling Office file support in SPO/OD4B -  https://docs.microsoft.com/en-us/microsoft-365/compliance/sensitivity-labels-sharepoint-onedrive-files?view=o365-worldwide#:~:text=1%20Using%20a%20work%20or%20school%20account%20that,and%202%20for%20each%20of%20your%20remaining%20geo-locations.
• Supported label capabilities - https://docs.microsoft.com/en-us/microsoft-365/compliance/sensitivity-labels-office-apps?view=o365-worldwide
• Known Issues with sensitivity labels: https://support.microsoft.com/en-us/topic/known-issues-with-sensitivity-labels-in-office-b169d687-2bbd-4e21-a440-7da1b2743edc#ID0EDD=Online

NOTE:

• I can actually get this to work if I enable the co-editing preview feature, however, it's a preview, and an active one at that, likely to have changes that will impact any deployment down the road before it's gold.   
• I do have an active case open - they just have not had a good answer yet, and I have a few more hoops to get through before we reach the product team. 

[Andra]

Hi @jshelbyjr ,

thank you for flagging this matter to the community. I retrieved your post.

In case you don`t find a suitable solution here, I recommend you try the Tech Community - see this forum: Welcome to the SharePoint group. (microsoft.com)

Have a great day ahead,

Andra