Hi @Thessa ,
First, The item level permission is not available for the Issue Tracking list and document libraries through UI.
Second, check the permission level of the user in site and list level. The Item Level Permissions functionality is available to this user only if the level of site and list is at least design.
Finally, with admin permissions, we can programmatically configure project-level permissions in SharePoint Online through PowerShell.
#Set Parameters
$SiteURL = "https://xxxx.sharepoint.com/sites/yyyy"
$ListName = "listname"
#Connect to SharePoint Online site
Connect-PnPOnline -Url $SiteURL -Credentials (Get-Credential)
#Get the List
$List = Get-PnPList $ListName -Includes ReadSecurity
#Set List Item-Security
$List.ReadSecurity = 2 #"Read items that were created by the user"
$List.WriteSecurity = 2 #Create items and edit items that were created by the user
$List.Update()
Invoke-PnPQuery
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