Hi StephenRice
Thank you for your reply. Hopefully some of my suggestions will implemented.
In regards to the tagging, which I assume you mean search, I did go through ms-support on my tenant (not premium support) to help me work out if there was an issue. I only got the sharing links once to show up in the external sharing stats page. I had to click stop sharing so only the owners had access to the document/folder, then I shared with an external user who was not part of my AD, so that it created a sharing link.
(I believe I did test that the external user had access to the document, but cannot guarantee I did this for every test. However, I would argue this isn't very good, as you could have a document externally shared for months, because the person has never accessed it, and you wouldn't know in the externally shared stats.)
It was only after I reindex the document library, and after about 20mins or so, the item came up saying it was shared. However, if I removed the share, and reindexed the document library, it still showed that it was externally shared, even when I checked it the next day. I have yet to see it properly working since and without a need to reindex the document library, or clear all permissions first.
We do have custom permissions on our sites. There are a couple of additional groups apart from Owners, Members and Visitors. Our library inherit permissions from the site initially. However, surely this shouldn't prevent it from working. I can set up a test now and check tomorrow, on a standard OTB team site.
Thanks
Paul