How to grant "allow_creation_of_external_badges" permission?

Hello!

We are using an API call to update user roles; these user roles also happen to grant badges. However, our API user doesn't seem to have the proper permission - we see error "User X does not have the following permission(): [allow_creation_of_external_badges]" (see screenshot).

It seems like the permission to grant the API user is "Create, edit, publish, and delete badges" - and the user has that permission (screenshot). Any other ideas of what permission our API user needs? (they also have "Manage roles, user bans, and abuse notifications in admin and user profiles" and "Manage roles in user profiles")

Thanks!!