You will need to create an Azure AD Group or Security group in order for this to work.
Open Azure AD,
Under Manage > Click Groups
Search for your group
Click on the group.
Then click Licenses
Then click Assign
Choose the license. If you want to turn off specific features you will do this in the assignment options after choosing your License Sku.
In the assignment options this is where you can turn off specific features you don’t want users licensed for.
Then Click Ok
Then Select Assign
Now you should see the product state as active under Licenses
Now go to Members and add your users. then go back to Licenses then Reprocess or wait 24-hours and the users should be licensed!