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I usually do this using the MBC tools on the My Dashboard page. I select edit merit badge requirements (I think?), then the badge, then the scout. Then I mark them requirement(s) or badge Counselor Approved.
Is that pathway not working, or are you going via the unit roster or your My Connections?
For this scout in my troop, I have the privilege of assigning myself as a counselor for a merit badge. Then I would approve him for the merit badge. The failure occurs at the beginning, when I click on the scout’s name in our troop roster, I get the error.
It looks like you have view profile and Sustainability merit badge connections to this scout currently. Neither give you the authority to add a merit badge connection via the roster.
The error message is a known bug. I’m not certain what the expected behavior is presently but you wouldn’t have access to change anything.
As functionality is moving over to Scoutbook Plus one item at a time, we have ended up with a few things that were overlooked. In the long run, this will be rewritten (or change even more than that) in Scoutbook Plus.