Microsoft support and I spent hour trying to find the "check the Content inspection option". We have now found it and hope you can update this document to explain this.
Under the section "Automatically label files" you have a Note that reads:
Automatic scan does not scan existing files until they are modified again. To scan existing files for Azure Information Protection classification labels, you must have at least one Content inspection File policy. If you have none, create a new File policy, delete all the preset filters, check the Content inspection option. Then, under Content inspection, click Include files that match a preset expression and select any predefined value, and save the policy. This enables content inspection, which automatically detects Azure Information Protection classification labels.
As we could not find that option, here is revised wording proposal:
Automatic scan does not scan existing files until they are modified again. To scan existing files for Azure Information Protection classification labels, you must have at least one Content inspection File policy. If you have none, create a new File policy, delete all the preset filters, *Choose Inspection Method: Built in DLP: Then set Content Inspection Enabled. Then, under Content inspection, click Include files that match a preset expression and select any predefined value, and save the policy. This enables content inspection, which automatically detects Azure Information Protection classification labels.
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