What could be the reason for this issue?
All features have not been enabled in the organization.
Consolidated billing has not been enabled.
The member accounts do not have tags enabled for cost allocation.
The member accounts have not manually enabled trusted access for Compute Optimizer.
Explanations:
Tag policies require the feature “All features” to be enabled in AWS Organizations. Without this, tag policies cannot be activated.
Consolidated billing being enabled or not does not affect the ability to activate tag policies or Compute Optimizer in AWS Organizations.
Cost allocation tags are not required for activating tag policies in AWS Organizations. Tag policies can govern tags regardless of cost allocation settings.
Trusted access for Compute Optimizer must be enabled for certain actions, but it does not affect the ability to activate tag policies in the management account.