To set up the Entra ID app “SharePoint Online Client Extensibility Web Application Principal”, the app needs to be enabled.
Prerequisite
You are a SharePoint site owner.
Steps
Open the SharePoint admin center.
Go to Show all > SharePoint > more features > Apps.
Apps tile in SharePoint Online
Then, select App Catalog > Apps for SharePoint.
The Manage apps window opens.Managing apps
Enable the app by selecting the Enable app button.
Enabling the app
Once you have enabled the app, you need to grant it API access. Select the Go to API access page button and follow the instructions.
Approving API access to the app
Result
By enabling the app, “SharePoint Online Client Extensibility Web Application Principal” is being added to app registrations in your Microsoft Entra admin center. This may take a few minutes.

Added SharePoint Online Client Extensibility Web Application Principal