Hello @Myatt Admin,
Thank you for posting your query on Microsoft Q&A.
I understand that you're encountering an error when trying to add a group to a Conditional Access policy. The error message reads, "Message from server: the server could not process the request because it is malformed or incorrect. 1040: NamedLocation with id 00000000-0000-0000-0000-00000000000000 does not exist in the directory."
I want to inform you that this issue was reported by many customers on August 20th. Our Product Group (PG) team identified the problem and has since resolved it. Could you please check if you are still experiencing the same issue?
This issue was triggered for users who were using legacy named locations in their Conditional Access policies. If Multifactor Authentication (MFA) trusted IPs named locations were included in the Conditional Access policy, those policies were affected by this behavior. I suspect that your Conditional Access policy might have included such a named location, which is why you were unable to make any changes.
Now that the issue has been fixed by the PG team, please check and confirm whether you are now able to successfully make changes to your Conditional Access policy.
I hope this information is helpful. Please feel free to reach out if you have any further questions.
If the answer is helpful, please click "Accept Answer" and kindly upvote it. If you have extra questions about this answer, please click "Comment". Thanks,
Raja Pothuraju.