Usually because of where the file came from. Files shared from another organisation often refuse to attach. Save the file to your own OneDrive and attach it through cloud files instead. Or copy and paste the text into the chat, with your instruction first and the data after it.
More in Microsoft Copilot
Can Copilot read files on my OneDrive or network drive?
Usually yes for OneDrive and SharePoint, with Work IQ on a full Microsoft 365 Copilot licence, but always test it, because it varies between organisations. Pick a document and ask Copilot whether it can see it and its contents. A network drive is not the same as OneDrive, so test that separately.
Do the Settings in the Copilot Chat menu apply only to that Chat?
No. Settings in the three dots at the top of Copilot Chat open the same global settings as the menu at the bottom of the screen. Any change you make there applies to all your chats. The three dots only show this option on a new, empty chat.
Can I tell Copilot how to name my chats and Pages?
Chats yes, Pages no. Put a naming rule in your custom instructions or save it as a memory, and new chats then follow it in your chat history. Pages are different: Copilot names them in a premade way before it reads your instructions, so rename each page yourself into whatever structure you want.