Security group is not working for external sharing in sharepoint onedrive external sharing settings!

Question

I want only my selected peoples can share files and folder of sharepoint and onedrive externally so i selected "only security group members can share externally" under more external settings in sharepoint admin center (refrence ss below)

I added my mailtest mail enabled security group in the setting but still the members of that group are unable to share externally, first i thought maybe it will work for normal security group so i also created normal security group and added it on the sharing settings but still my group members unable to share externally they are getting following error(ss below)

When i unchecked the security group setting under more external sharing my users are able to share externally but i do not want all users can share externally, i only want specific people to share externally. I have checked this feature on multiple tenant this security group feature is not working in any of the tenant, also discussed with my other business colleagues of diff tenant, they are facing same issue.
I believe this is a bug which should be resolved by microsft sharepoint dev team ASAP, as this feature is necessary for buisness org.

Hope someone from Microsoft sharepoint team will reply me back with the solution of it.

Answer 1

Hi @Shubh,

Per my research, you will need to select Anyone to share files and folders externally.

For more details, you could refer to the document

https://learn.microsoft.com/en-us/sharepoint/manage-security-groups

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