Errors when trying to install any extension

Having some trouble installing my first extension. I saw the backup extension and it sounded pretty cool, so I tried it, only to be greeted by this:

Installing new extension "docker/volumes-backup-extension:1.0.0"
Installing service in Desktop VM...
Setting additional compose attributes
executing 'docker --context default compose -p docker_volumes-backup-extension-desktop-extension -f extensions/docker_volumes-backup-extension/vm/docker-compose.yaml up -d' : exit status 1: 
Network docker_volumes-backup-extension-desktop-extension_default  Creating
Network docker_volumes-backup-extension-desktop-extension_default  Created
Container docker_volumes-backup-extension-desktop-extension-service  Creating
Container docker_volumes-backup-extension-desktop-extension-service  Created
Container docker_volumes-backup-extension-desktop-extension-service  Starting
Error response from daemon: Mounts denied: 
The path /run/guest-services/docker_volumes-backup-extension
is not shared from OS X and is not known to Docker.
You can configure shared paths from Docker -> Preferences... -> File Sharing.
See https://docs.docker.com/docker-for-mac/osxfs/#namespaces for more info.
.

Removing extension docker/volumes-backup-extension:1.0.0...
Removing extension VM service...
Extension removed from Desktop VM
VM service socket forwarding stopped
Extension UI tab Volumes Backup & Share removed
Warning: extension image docker/volumes-backup-extension:1.0.0 could not be removed: executing 'docker --context default image remove docker/volumes-backup-extension:1.0.0' : exit status 1: 
Error response from daemon: conflict: unable to remove repository reference "docker/volumes-backup-extension:1.0.0" (must force) - container 5adf938964c1 is using its referenced image 9c969af4d556

Extension "volumes-backup-extension" removed

Any ideas what I’m doing wrong?
Thanks!

What is your mac version and Docker Desktop version? It worked on my macOS Monterey, Docker Desktop 4.12 without configuring any path as it mentioned in the error message.