Sharepoint Sensitivity Label + Graph + Metered API

Question

Following below article, we are trying to assign sensitivity label to a item(.docx) file. but facing "notsupported" error.

https://learn.microsoft.com/en-us/graph/metered-api-setup?tabs=azurecloudshell

https://learn.microsoft.com/en-us/graph/api/driveitem-assignsensitivitylabel?view=graph-rest-beta&tabs=http

IRM is disabled in SharePoint.

We also tried with logic app, but resulting in 400 BAD Request Error(fully reviewed the URL, payload) & user trying to assign sensitivity is admin

 "code": "notSupported",
        "message": "Sensitivity label cannot be assigned due to unsupported feature.",