Every time I try to Co-edit, FYI displays a message that I do not have permission to do it. It just shows a button to request permission.
The Cabinets required for Co-edit have not been created, or the security has not been set up to give access to team members appropriate for the specific folder. The best practice is to use Office 365 groups to enable access for users without having to add and remove users individually.
You need to be added to the practice's OneDrive FYI - Co-Edits folder.
Refer to Step 3 - Update the Cabinet folders and Step 4 - Check or Change Security from OneDrive in Preparation for Co-Edit and Associated Security.