we are looking into deploying Veeam for Office 365 for our 600 mailboxes and are currently preparing a test setup. I now would like to add our Office 365 tenant to VBO and am currently setting up the service account and permissions in Office 365. We would like to use a service account with MFA so we are using modern authentication.
Regarding the SharePoint service account I understand that the only role needed is the SharePoint Administrator role. Regarding Exchange, we seem to need the roles ApplicationImpersonation, View-Only Configuration, View-Only Recipients, Mailbox Search, and Mail Recipients as described in the following Veeam article:
https://www.veeam.com/kb2969#AzureADApplication
I however currently don't understand the point of the Grant this account required roles and permissions checkbox during setup. The online user guide states the following:

So it actually seems that this checkbox only adds the ApplicationImpersonation role but not the other required ones for Exchange. So whats the point of the checkbox when you need to assign the other aforementioned permissions manually anyway? Or is it meant for service accounts with global admin permissions to also assign them the ApplicationImpersonation role (which maybe is not in included in the global admin role?!).
I also don't understand the sentence of the user guide:
The ApplicationImpersonation role can only be assigned to organizations that are not in the compressed state (i.e. to hydrated organizations)
What are compressed and hydrated organizations? I'm only aware of hybrid organizations.
Thanks
Michael