Explanation
Scenario: Licensing Issue
1. You attempt to assign a license in Azure to several users and receive the following error message: "Licenses not assigned. License agreement failed for one user."
2. You verify that the Azure subscription has the available licenses.
Solution:
License cannot be assigned to a user without a usage location specified.
Some Microsoft services aren't available in all locations because of local laws and regulations. Before you can assign a license to a user, you must specify the Usage location property for the user. You can specify the location under the User > Profile > Settings section in the Azure portal.
Reference:
https://docs.microsoft.com/en-us/azure/active-directory/users-groups-roles/licensing-groups-resolve-problems