Cannot enable the site collection app catalog feature in this site collection because it has not been approved by the tenant admin. If you have setup site collection app catalog in a SharePoint online site using PowerShell or PnP cmdlet’s explained in this article and run into this issue – Don’t Panic! Give it some time and it will resolve itself.
After running the PowerShell cmdlet to setup site collection app catalog, it appears as if everything is instantly set and done. We don’t see any response back in PowerShell, making us believe that it is setup instantly, which is not true.
If you are too quick to upload your .sppkg solution package to the catalog, you will be greeted with above error message the upload failed – Cannot enabled the site collection app catalog feature in this site collection because it has not been approved by the tenant admin.
While the description in the descriptive, it has nothing to do with tenant admin approval. It is just the backend process taking its time to setup the catalog. Give it some time and try after 15-20 mins. Solution will go through the upload and available ready for deployment.