Unable to restrict Microsoft 365 Groups In Teams

Hi TonyRedmond, adam deltinger  and jcgonzalezmartin 

TonyRedmond I did contact MS Support and issue is resolved.  Here is summary what happened: 

1. In Microsoft call, they were added a different user (Alex) to the group as a Member and Owner as well as. Removed my account (Aroh)  from the RestrictM365Groups
   
   
2.   After re-running the script

$GroupName = "RestrictM365Groups"
$AllowGroupCreation = $False

Connect-AzureAD

$settingsObjectID = (Get-AzureADDirectorySetting | Where-object -Property Displayname -Value "Group.Unified" -EQ).id
if(!$settingsObjectID)
{
    $template = Get-AzureADDirectorySettingTemplate | Where-object {$_.displayname -eq "group.unified"}
    $settingsCopy = $template.CreateDirectorySetting()
    New-AzureADDirectorySetting -DirectorySetting $settingsCopy
    $settingsObjectID = (Get-AzureADDirectorySetting | Where-object -Property Displayname -Value "Group.Unified" -EQ).id
}

$settingsCopy = Get-AzureADDirectorySetting -Id $settingsObjectID
$settingsCopy["EnableGroupCreation"] = $AllowGroupCreation

if($GroupName)
{
  $settingsCopy["GroupCreationAllowedGroupId"] = (Get-AzureADGroup -SearchString $GroupName).objectid
}
 else {
$settingsCopy["GroupCreationAllowedGroupId"] = $GroupName
}
Set-AzureADDirectorySetting -Id $settingsObjectID -DirectorySetting $settingsCopy

(Get-AzureADDirectorySetting -Id $settingsObjectID).Values


$Values = Get-AzureADDirectorySetting | ?{$_.DisplayName -eq "Group.Unified"}
$GroupId = $Values.Values |?{$_.Name -eq "GroupCreationAllowedGroupId" } | Select -ExpandProperty Value
Write-Host ("The name of the group defined by policy to control group creation is {0} and its object identifier is {1}" -f (Get-AzureADGroup -ObjectId $GroupId).DisplayName, $GroupId)
Get-AzureADGroupMember -ObjectId $GroupId​

and waiting a moment, the settings seemed to be working correctly.

• The issue was, that I was owner of the group but there was no member for the RestrictM365Groups security group. 
  
  
• After adding my name in both in Owner and Member  
  
• I can create teams with my account
  
  

   

  
  
   
•  Other users cannot create Teams
  
  
  

• The Microsoft 365 Groups settings at Azure portal has to be turned off.

  

   

  Thanks a lot for helping and providing your help!