In Microsoft Defender for Cloud Apps, OAuth app policies monitor and control third-party applications that have OAuth permissions to your Microsoft 365 environment. They allow administrators to review app permissions, detect over-privileged apps, and revoke access where needed.
This aligns with the SC-300 topic "Monitor and manage app permissions in Defender for Cloud Apps", which states:
"OAuth app policies allow you to detect risky applications connected via OAuth authorization and monitor app access to your organizational data."