Third party application access via OAuth is the correct setting to turn on.

This setting allows Azure DevOps to authorize third party applications using OAuth so that services such as the Azure Pipelines Slack app can post messages to a Slack channel on behalf of the organization. Enabling Third party application access via OAuth permits the OAuth consent flow and organization level approval that the Slack integration requires to send build notifications.

Azure Active Directory Conditional Access Policy Validation is not the correct choice because that setting deals with Azure AD sign in and access policies and it does not enable OAuth app access for Azure DevOps integrations.

Personal access tokens are individual credentials used for API or CI automation and they do not provide the organization level OAuth approval flow that third party apps like the Slack integration need.

Alternate authentication credentials is a legacy method for basic authentication and it is not used to enable OAuth integrations. This approach has been deprecated for Azure DevOps Services and is not the mechanism for allowing Slack to post notifications.

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