Why is “Allow from this source” grayed out?

Since Android 8, there is no longer a general “Unknown sources” setting. Instead, Android handles this on a per-source basis. That means you do not allow “all APKs” to be installed, but, for example, specifically your browser or your file manager. If “Allow from this source” is grayed out, our app is not blocking the installation. Instead, a higher-level setting in your Android system is.

This happens especially often on devices with a work profile, device management, or other admin policies. Android Enterprise explicitly allows IT administrators to block installations from unknown sources in the work profile or even across the entire device.

It is also important to know that the permission always applies only to the exact app from which the installation is started. So if you download the APK in your browser but later open it in your file manager, that exact source must be allowed.