Debug in Teams (Desktop) is blocked on "Permissions needed. Ask your IT admin to add ..." after migration of Teams permission policies

[dionoid]

Describe the bug
Recently the Teams' permission policies in my M365 Dev Sandbox were automatically migrated to use App Centric management. Since then, when starting Debug in Teams (Desktop), all provisioning works fine, but I end up in Teams showing the app's info window with an error in a red box saying "Permissions needed. Ask your IT admin to add to this team/chat/meeting."

I've looked around in the Microsoft Teams admin center, but all options look fine; Upload custom apps is set to On in the Global (Org-wide default) policy.

Also, in VSCode, under the M365 Agents Toolkit accounts, I see my account has 'Custom App Upload Enabled' checked, so it seems fine.

As a workaround I've tried to use Debug in Teams (Edge), which doesn't show the error in the info box, but I can't send the agent any messages, as the input box says "You cannot send messages to this bot".

To Reproduce
Steps to reproduce the behavior:

1. Run Debug in Teams (Desktop) for an agent created with the M365 agents toolkit.
2. Wait until all provisioning in VSCode is done, and the Teams app is shown with the error message "Permissions needed. Ask your IT admin to add to this team/chat/meeting."

Expected behavior
I expected to be able to see the 'Add' button in teams, so I could add my Agent App.

Screenshots

VS Code Extension Information (please complete the following information):

• OS: macOS
• Version: Microsoft 365 Agents Toolkit 6.0.2

[m365-agent-toolkit-assistant]

👋 Hi @dionoid,

Thank you for reporting this issue! We want to let you know that:

⏱️ Our team will personally review your issue
🎯 You can expect a response within 2 business days

✨ This is an AI-generated initial response
🤖 AI-Generated Preliminary Analysis:

There are multiple reports matching your scenario—after Teams permission policies were migrated to App Centric management, sideloading/debugging custom apps produces a “Permissions needed. Ask your IT admin...” message despite policies appearing correct.

Troubleshooting steps:

1. Double-check Teams Admin Policies:

   • In the Teams Admin Center, ensure both “Upload custom apps” and “Custom apps” toggles are ON under Teams apps > Setup policies > Global. Some tenants list these separately (see Microsoft Docs).
   • Make sure the app isn’t blocked under Teams apps > Manage apps.
   • Review all custom policies—sometimes a user is assigned a restrictive policy that overrides Global.

2. Provisioning Delay:

   • When migrating to App Centric management, some admins have reported a provisioning delay (can take up to 28 days) before new settings take effect. Manual sync by Microsoft support sometimes resolves this.

3. Contact Support if Issue Persists:

   • If all policies appear correct and it’s been several days, open a support request and ask for a manual Teams app policy sync.

References:

• Issue #780
• Custom app upload setting

Let me know if all toggles are on, and your wait time since policy migration.

✨We'd love your feedback! Please take a moment to fill out our survey.

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Note: This is an automated first response generated by AI. A human team member will review your issue and provide a more detailed response soon. We appreciate your patience!

[HuihuiWu-Microsoft]

Duplicated with #14193. Already fixed by service team and please wait for the fix to roll out.