We currently federate our Azure AD through Okta. We do not have on-prem AD. Due to to the fact that the manager field in M365 or AzureAD can only be update through on-prem AD when synced, and...
According to this - Set-MgUserManagerByRef (Microsoft.Graph.Users) | Microsoft Docs that field is read only.
I have a feeling that the Manager field actually comes from SharePoint so maybe via there? Failing that, log a support request with MS in your tenant, they are free.