Hello Ada Graves,
Thanks for posting your concerns on Microsoft Q&A platform.
It seems that you are encountering permission issues due to a deny assignment on the resource group where your container app is located. Since the container app was automatically generated and placed in a resource group that you cannot edit, this is likely preventing you from linking it as the backend API for your static web app.
To resolve this, you may need to check the permissions associated with the resource group and ensure that you have the necessary access rights to link the container app. Additionally, since the container app is in a different resource group, you should verify if there are any policies or restrictions that prevent linking resources across different resource groups.
If you're unable to change the permissions or move the container app, consider creating a new container app in a resource group where you have full control, or consult with your Azure administrator for further assistance.
Note: Azure Container Apps requires the Static Web Apps Standard plan, so ensure that your static web app is on the correct plan as well.
Also, for your better understanding please refer the below document.
API support in Azure Static Web Apps with Azure Container Apps