Scenario: Group based licensing is enabled in Azure AD. Exchange online is not assigned through the group based licensed. Newly added users to the group fail to get licenses assigned via the group. Reprocessing the group based license throws error:

Licenses could not be assigned or removed due to an error

Solution: A recent service plan backfilled by the O365 Commerce Team into the Office and Microsoft SKUs Microsoft Bookings a has been added as Enabled on all the licenses. This service plan has a dependency on Exchange Online (Plan 1) or Exchange Online (Plan2).

Disabling the Microsoft Bookings service plan in the affected groups should resolve the licensing error.