Either should be fine. Do note that it can take some time before the license changes are processed. You can check the status by going to the group's settings page, and if more than 24h have passed, you can also press the Reprocess button there.
Azure AD Group Licensing
megs28
6
Reputation points
I'm looking at moving to assign group licenses to make account creation easier.
Do I have to use an O365 group or can I use a sync'd AD group? I can't see to get it to work with the later so I suspect not, although it doesn't show errors.
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megs28 6 Reputation points
2020-08-17T15:30:56.413+00:00 Hmm.
So where do I go from here? It says it applies successfully in the group settings page, even after 24 hours. However, it never applies to license, even when I revoke the license first so it isn't using direct licensing. When I use an Azure AD group it applies just fine.