Co Authoring with Sensitivity Labels

Hello,

I am working with sensitivity labels with my organization. We currently have Standard, Confidential, and Highly Confidential which all are encrypted. I have Co-Authoring turned on but I have some trouble with. We a lot of documents being collaborated on.

Standard: Co-Authoring functions normal and Auto-Save is toggled on.

Highly Confidential: Custom Permission in Sensitivity Label (View, Edit, Reply, Forward) I asked copilot and it stated even though my permissions are selected custom I have "Edit" on their for my internal users it is reading it as Co authoring; Co-Authoring is on and functioning but internal end users Auto-Save is toggled off and they are being asked to save a copy of the document or excel sheet then upload it again to SharePoint.

Why isn't "Auto-Save" toggled on for "Highly Confidential" label? Can it be adjusted so it can be on? Do I have to make adjustments to my permissions in the Sensitivity label?

Any help is appreciated.

Thank you!