Issue
The O365 Set Approval Status action is used to Set the approval status for items in a list or document library on SharePoint Online.
When using this action on items located in a Folder or a Document set the error : "Unable to find list item to update" can occur.
Error Code
"Unable to find list item to update"
Resolution
In the Items to update section of the action configuration make sure the "Search Folders" check box is ticked.