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For better understating the issue: can you please share the screenshot of the error message?
Before enabling this setting, make sure Azure Active Directory Domain Services (Azure AD DS) is enabled for your Azure tenant. Otherwise, this operation will fail.
We strongly recommend that you review the How it works section to select the right AD source for authentication. The setup is different depending on the AD source you choose.
However can you cross-verify that you have completed the following prerequisites: (Before you enable Azure AD over SMB for Azure file shares)
After completing the prerequisites, if you still find any issue, please let us know, I would like to work closer on this issue.
This article lists common problems that are related to Microsoft Azure Files when you connect from Windows clients. It also provides possible causes and resolutions for these problems.
Enable Azure AD DS authentication for your account
If you're new to Azure Files, we recommend reading our planning guide before reading this article.
Please let us know if you have any further queries. I’m happy to assist you further.
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