The authenticated user has not granted the app xxx write access to the child file xxx, which would be affected by the operation on the parent

I hit the below error when trying to insert the permission

"code": 403, "message": "The authenticated user has not granted the app xxx write access to the child file xxx, which would be affected by the operation on the parent"

Here is what I am doing

We have two Google Account, 1. API Account - we used to create folder and change the ownership to Business account 2. Business Account - upload a file

now we try to share to folder to customer and we hit the above error

And here I using OAuth 2.0 Installed Applications to get the access token.

Please advise what is wrong I am doing here