Create extensionProperty - Insufficient privileges

Question

I am trying to use Graph API to create an extension, but for some reason I am getting the "Insufficient privileges" error.
The application is using a client credentials provider, so it requires application permissions and not delegated ones.
The Microsoft documentation (application-post-extensionproperty) says that a permission of Application.ReadWrite.OwnedBy is needed.
I currently have three permissions set in my application:

• Application.Read.All
• Application.ReadWrite.OwnedBy
• User.ReadWrite.All

All three are type "Application".

This is the code that I am trying to run:

ExtensionProperty extensionProperty = new ExtensionProperty  
{  
    Name = extensionName,  
    DataType = "string",  
    TargetObjects = new List<String>  
    {  
        "User"  
    },  
};  
  
try  
{  
    ExtensionProperty result = await GraphClient.graphInstance.Applications[config["objectId"]].ExtensionProperties  
        .Request()  
        .AddAsync(extensionProperty);  
    return "Extension created!";  
}  
catch (Exception exError)  
{  
    Debug.WriteLine(exError.ToString());  
    return "Error while creating extension";  
}  

And it returns the error of:

Status Code: Forbidden  
Microsoft.Graph.ServiceException: Code: Authorization_RequestDenied  
Message: Insufficient privileges to complete the operation.  

If I list the extensions, that does not return an error - although the list is empty since there are no extensions created yet.