Users with SharePoint Admin roles should be able to add (and remove) Site Collection App Catalogs
A user that has been granted the role SharePoint Admin should have administrative rights over the site collections. This should include being able to add (and remove) site collection app catalogs. This should be particularly true when that user is also the site collection administrator.
The error message says "Must have Manage Web Site permissions or be a tenant admin in order to add or remove sites from the site collection app catalog allow list"
Site Collection administrators have manage web permissions, minimally, yet are unable to do so. This doesn't make sense. This was reported as a bug but closed because it was reported as being by design.
Major problem for a large organization!
Same issue! SCA on team sites should be able to create a app catalog! How can they not have Manage web when they are an SCA?
Ali Robertson commented
tl;dr Ensure you're a site collection administrator of the app catalog site collection in the tenant.
NARESH kUNCHAM commented
We have the same issue. any resolution for it ..