Hi Robert Casse,
Thank you for posting your query on Microsoft Q&A!
There are a couple of reasons why you might not be able to create a dynamic group, you would first need to have at least an Entra ID P1 license, as this is a paid feature.
The other possible reason is if you are creating a role assignable group i.e the option "Microsoft Entra roles can be assigned to the group". This is to prevent any unintended elevation of roles due to a user being automatically added to the group.
Do let me know if this helps and if you have further queries I would be happy to help.
Please "Accept the answer" if the information helped you. This will help us and others in the community as well.
Kind Regards,
Donal