Content Fragments not available in a configured folder

I have some content fragments defined in a project folder. I then went to the configuration manager and created a policy that enabled content fragments models in the configuration folder then also enabled GraphQL as well. I then applied that policy to my parent folder for assets, where I planned to create the content fragments. I was then unable to see my content fragment models when I tried to create a content fragment in that folder or child folders that were set to the default inheritance. When I moved my models to the global folder (I don’t think this should be the resolution) I could then see my defined models.

I would prefer to do this correctly and use the content fragments in the project folder so they can be added to source control without affecting other configurations.

What could be a reason that I am not able to see the project specific models, but I can if see the models in the global folder. Again, I followed the directions on creating a policy to allow the project models. This is in a local sandbox where I am logged in as the admin so it should not be a user permissions issue.