Unable to Create a Rule on a Library with Contribute Permission

AnthonyLP​ This is a known issue. There is a lot of inconsistency between lists and libraries unfortunately.

With the retirement of SharePoint Alerts the SharePoint Rules need a complete overall to get them in a state where they are comparable. Another large limitation is that you can only create a maximum of 15 rules per library.

Currently, you only need Read access on a list or library to set up SharePoint Alerts which makes sense (you're not creating or updating list items or files, etc.). This is a massive blocker to replacing SharePoint Alerts as we would now need to provide users with Contribute or Edit rights which is absolutely not an option (least permissioins).